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Bankrupt medical technology firm UpHealth Holdings Inc. told a Delaware bankruptcy court it has struck a settlement with India’s Glocal Healthcare Systems Private Ltd., ending a bitter $200 million adversary battle that grew out of a soured merger.

Filed Monday, the motion details how Glocal and its shareholders—including Syed Sabahat Azim, Richa Sana Azim, Gautam Chowdhury, and Kimberlite Social Infra Private Ltd.—have agreed to drop their legal crusade in exchange for a carefully crafted deal.

Terms of the UpHealth Chapter 11 Glocal Deal

Under the agreement:

• Glocal will pay $10 million to UpHealth.

• Glocal will withdraw its push for a Chapter 7 liquidation, filed in January.

• Glocal will receive a $37.5 million unsecured claim in the Chapter 11 process.

“The debtors believe that the settlement is fair and reasonable and in the best interests of the debtors’ estates and their creditors,” UpHealth said in its motion, emphasizing that the pact resolves all disputes in one sweeping stroke.

Support has already lined up behind the deal, with both the official committee of unsecured creditors and the ad hoc group of secured noteholders signaling approval.

A Settlement on the Eve of a Crucial Hearing

The resolution comes just weeks before a Sept. 10 hearing, where the judge was set to weigh confirmation of UpHealth’s Chapter 11 plan and the dismissal of Glocal’s adversary proceeding.

Back in July, UpHealth accused Glocal of “bad faith” tactics, delay, and obfuscation. Mediation dragged on until June, with little progress—until last-minute negotiations sparked Monday’s signed truce.

UpHealth’s Tumultuous Path to Bankruptcy

Florida-based UpHealth and six affiliates filed for bankruptcy in September 2023, citing more than $100 million in debt. The company’s financial unraveling traces back to its 2021 tie-up with Cloudbreak Health LLC, which formed the publicly traded UpHealth Inc.

Compounding its troubles, UpHealth lost a $31 million fee dispute with investment bank Needham & Co. LLC, a financial adviser on the merger. That loss was quickly followed by the bankruptcy filing.

In October 2024, UpHealth submitted its Chapter 11 plan, later winning interim court approval of its second amended disclosure statement, giving the company the green light to solicit support.

What the Reorganization Plan Delivers

According to filings, the proposed plan would distribute:

• $82.5 million to general unsecured claim holders

• $236.4 million to intercompany claim holders

• Roughly $29 million to noteholders of senior secured notes due 2025

The reorganization is designed to stabilize UpHealth’s balance sheet and salvage value after years of costly disputes and strategic missteps.