Bloomberg News

Physiotherapy Files Bankruptcy With Creditor-Supported Plan (1)

November 12, 2013

Court Square Capital Partners LP’s Physiotherapy Holdings Inc., which provides outpatient rehabilitation and sports-injury therapy, filed for bankruptcy protection with creditor support for a restructuring plan.

The Exton, Pennsylvania-based company listed debt of as much as $500 million and assets of as much as $1 billion in documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware. About 50 affiliates also are seeking court protection.

“The company is profitable and has positive cash flow,” Chief Executive Officer Martin McGahan said in a statement. “This process relates solely to the issue of restructuring the balance sheet” and shouldn’t affect operations, he said.

Court Square, the New York-based private-equity firm spun off from Citigroup Inc. in 2006, bought Physiotherapy in March 2012 for an undisclosed price. Court Square-affiliated funds own about 90 percent of Physiotherapy’s equity, according to court papers.

Physiotherapy’s restructuring plan is supported by all of the company’s senior secured lenders and 99.7 percent of its bondholders, according to the statement. Terms of the plan weren’t immediately available.

Bank of New York Mellon Trust Co., as trustee for bondholders, is listed in court papers as the largest unsecured creditor, owed about $218.5 million. The 11.875 percent senior unsecured bonds trade at about 58 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

The case is In re Physiotherapy Holdings Inc., 13-bk-12965, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at mbathon@bloomberg.net

To contact the editor responsible for this story: Andrew Dunn at adunn8@bloomberg.net


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