Physician staffing company Envision Healthcare is planning to file for chapter 11 bankruptcy, the Wall Street Journal reported, citing people familiar with the matter.
The filing could happen as early as this weekend, the newspaper reported Tuesday. Much of Nashville, Tennessee-based Envision’s $7 billion in outstanding debt would be swapped for shares if the company restructures.
Private equity firm KKR, which bought Envision in a $10 billion deal in 2018, has already written off the investment, marking one of its biggest losses to date, according to the report.
Spokespeople for Envision and KKR declined to comment to Modern Healthcare.
Envision has struggled financially amid soaring labor costs and multiple legal disputes with UnitedHealth Group, which removed Envision from its provider networks in 2021.
Envision notched a win in March when a federal court ordered UnitedHealth to pay $91.2 million for violating its contract by reducing reimbursements and refusing to accept physicians into its networks.
The No Surprises Act also dealt a blow to Envision’s financial performance by prohibiting many types of out-of-network bills from which the company was profiting.
In September, Moody’s Investor Services downgraded Envision’s debt to a “C” rating, which is typically applied to debts in default that show little prospect for recovery. At the time, Moody’s said Envision’s capital structure was unsustainable and predicted a likely bankruptcy or major restructuring in the near future.