Addiction treatment provider AAC Holdings has filed for protection from its creditors in Delaware bankruptcy court and has received a commitment for more funding from its bank group.
AAC’s Chapter 11 comes nearly four months after its lenders, led by Credit Suisse, said the Brentwood-based company had until March 20 to come up with a restructuring plan. The banks had in January lent the company another $10 million as its leaders sought a way out of their financial predicament and have now committed another $62.5 million. AAC, which runs 11 treatment centers in eight states, listed debts of $449 million and assets of $517 million in its Chapter 11 filing.
“We have been transparent about the need to reduce our debt, and this recapitalization will significantly enhance our financial position, building on the progress we’ve already made to strengthen and improve our operations,” CEO Andrew McWilliams said in a statement. “We aim to expedite this process so that we can concentrate on fulfilling our mission.”
AAC officials expect the bankruptcy process, which will look to significantly cut the company's debt load, to take four months. During that time, they say, AAC’s operations will continue as they have without layoffs or facility closures.
Shares of AAC (Ticker: AACH), which had a collective market value of more than $1 billion not long after the company went public in 2014, finished last week at 27 cents. The company’s equity was worth a total of $6.8 million.