Tennessee-based Wellpath, the operator of Montgomery County's Mental Health Treatment Facility, has filed for Chapter 11 bankruptcy to reorganize its correctional healthcare business.
Located in Tennessee, Wellpath, a leading provider of correctional healthcare, has filed for Chapter 11 bankruptcy and is looking to sell its Recovery Solutions business, which operates the Montgomery County Mental Health Treatment Facility. Officials anticipate minimal service delays, even with the reorganization in place.
Last month, the medical provider for Montgomery County Jail announced that the reorganization would reduce its debt by $550 million. County Attorney B.D. Griffin stated that the facility's operations will remain uninterrupted.
The new owners are set to renew Recovery Solutions' contract with the county . “Wellpath anticipated this bankruptcy, and we've been assured there will be no service changes during the transition,” Griffin stated.
Wellpath is set to sell Recovery Solutions to a group of ad hoc lenders participating in a court-supervised auction for its assets. The lender group will provide temporary financing to support operations throughout the sale process.
Ben Slocum, the CEO of Wellpath, pointed to staffing challenges related to COVID-19 and increased operational expenses as the reasons for the decision. The reform ensures the company's financial stability and upholds service quality.
The Montgomery County facility, now under new ownership, is expected to remain fully operational, with staff retaining their positions.
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