American Addiction Centers

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Summary

Chief Restructuring Officer

Brentwood, TN

American Addiction Centers (AAC) is a leading provider of inpatient and outpatient substance abuse treatment services for individuals with drug addiction, alcohol addiction, and co-occurring mental and behavioral health issues. The company operates 26 addiction recovery facilities in eight states.

Carl Marks Advisors (CMA) was engaged as financial advisor to provide operational and financial guidance and was later appointed Chief Restructuring Officer (CRO). As CRO, CMA managed AAC’s Chapter 11 bankruptcy process, including filing for protection and serving throughout the bankruptcy.

 

Key Challenges
Healthcare Reimbursements
Healthcare Policy
Operational Disruptions & COVID 19
Working Capital & Liquidity Shortage
Deferred Capital Expenditure

Engagement Highlights

Management Structure and Process

  • CMA was hired as CRO after preparing an initial assessment report which included a thorough review of AAC’s historical and projected financial and operational performance.
  • Assessed working capital and liquidity needs on a rolling 13-week basis and completed a report on capital expenditure requirements.
  • Preserved jobs of substantially all AAC’s 2,000 employees.

Bankruptcy Process

  • Filed for Chapter 11 on June 20, 2020, with more than $550 million of debt.
  • Obtained $62.5 million DIP facility and prepared DIP budget.
  • Developed a “toggle Chapter 11 plan” whereby the debtor marketed its assets for sale while preserving the option for a standalone balance sheet reorganization, providing lenders with a choice to bid on the assets or be a plan sponsor.
  • Plan of Reorganization with lenders as plan sponsor was confirmed within four months of filing.

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