NEW YORK (AP) — Overwhelmed with $576 million in debt, hospital operator LifeCare has filed for Chapter 11 bankruptcy protection, and plans to sell itself.
The Plano, Texas, chain runs 27 long-term hospitals Texas, Pennsylvania, and eight other states. It said it will continue to do business and pay its employees through the bankruptcy process.
The company, which was acquired by private equity firm Carlyle Group L.P. in 2005, said it has agreed to be bought by a group of its senior secured lenders, but hopes to see what results from an auction supervised by the bankruptcy court.
According to a bankruptcy court filing, LifeCare had $575.9 million in debt and $422.2 million in assets. Its biggest creditor is US Bank, which owns $128.1 million in senior notes.
Carlyle Group bought LifeCare for $570 million in August 2005. Weeks later, three of the company’s hospitals in New Orleans were destroyed by Hurricane Katrina.