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A healthcare provider that recently left the South Texas market has failed to stem losses and is filing for bankruptcy.
Miami, Florida-based Cano Health filed for Chapter 11 bankruptcy protection Sunday, according to the South Florida Sun Sentinel.
Cano Health had offices across the Rio Grande Valley and South Texas, but on Sept. 26, 2023, the South Texas locations became part of Conviva Care Centers, a group of primary care specialists dedicated to senior health care.
In the filing made in the U.S. Bankruptcy Court for the District of Delaware, Cano listed $1.2 billion in assets, including a little over $2 million in cash on hand and $1.4 billion in debt. The largest unsecured creditor is U.S. Bank, owed $306 million, according to the filing.
Cano, which went public three years ago, said in its filing Sunday that it received a commitment for $150 million in debtor-in-possession financing from certain existing secured lenders to reduce debt, support existing operations, and complete a turnaround. It hopes to emerge from bankruptcy in the second quarter.
“I am confident we will emerge from this process a stronger organization with the necessary resources in place to continue delivering the quality of care our patients expect and deserve,” CEO Mark Kent said in a written statement.
The company’s struggles began in early 2023 when Cano had been growing rapidly by opening new locations while it faced major liquidity issues. Modern Healthcare reported Barry Sternlicht, a billionaire real estate investor; Dr. Lewis Gold, co-founder of Sheridan Healthcare; and Elliot Cooperstone, managing partner of InTandem Capital Partners, resigned in March 2023 and called for then-Cano Health CEO Dr. Marlow Hernandez to be removed. Hernandez stepped down in June and Mark Kent became interim CEO.
At that time, Kent pulled back on expansion and began cost-cutting.
In addition to divesting its Texas operations, the company said it has also left the California, Nevada and Puerto Rico markets. Its remaining Florida offices are heavily concentrated in South Florida.
Cano also said it expects to achieve approximately $290 million of annualized cost reductions by the end of 2024.
Tribune News Service contributed to this report.