The parent company of American Addiction Centers has concluded its bankruptcy reorganization, during which is shed about $500 million of debt.
The reconstituted AAC runs 26 facilities in eight states and employs more than 2,000 people. It is, as it did in the runup to its Chapter 11 filing, being led by CEO Andrew McWilliams, who took the helm from founder Michael Cartwright early this year.
“We are thankful to the court and our senior secured lenders for recognizing the critical need for our services both now and in the future,” McWilliams said in a statement. “We are excited to be positioned for growth as the first company to truly transform the treatment of substance abuse.”
A quintet of five investment firms that controlled a large portion of AAC’s pre-bankruptcy debt had sought this summer to find a buyer for the company. That effort was unsuccessful, leaving the firms in control of the Brentwood-based company for the near future.
McWilliams is one of seven board members of the new AAC. The others have been designated by the investment firms and are:
• Jason Gart, an analyst at HG Vora Capital Management, which can designate two directors as long as it owns at least 17.5 percent of AAC’s equity
• Sengal Selassie, co-CEO and co-founder of Brightwood Capital Advisors and former managing partner at Cowen Capital Partners. Brightwood also has the same board designation rights as HG Vora.
• Mikhail Katz, director at Brightwood and a former senior VP at Jefferies Finance
• Loren Beck, a commercial litigator and former president and chief legal officer at Cliffside Malibu
• Bowen Diehl, president and CEO of Capital Southwest Corp., who will chair the board. Diehl is a former chairman of The Meadows of Wickenburg, an Arizona-based provider of treatment for alcohol and drug addiction.
• Mark Stolper, CFO of publicly traded RadNet and a former investment banker
Similar to HG Vora and Brightwood, asset manager CQS LLC can designate a board member if it owns at least 8.75 percent of AAC’s equity. Capital Southwest and Main Street Capital can jointly designate a director provided they also own a combined 8.75 percent.