NU Online News Service, May 28, 2003, 12:57 p.m. EDT – Onex Corp., Toronto, has agreed to invest between $100 million and $200 million in Magellan Health Services Inc., Columbia, Md.
Magellan, a company that runs mental health and drug treatment programs for one-quarter of all U.S. residents, filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in March.
Magellan had been counting on $50 million in financing from some of its big unsecured creditors to help it reorganize and wipe out about half of its $1 billion in debt.
The new financing agreement should help Magellan give more cash to its creditors, the company says.
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The financing agreement is subject to the approval of the U.S. Bankruptcy Court in New York, but the agreement already has the support of the official unsecured creditors committee, Magellan says.