Company’s Voluntary, Pre-Arranged Chapter 11 Filing Has the Support of Lenders and Major Equity Holders
Benefytt’s Operations to Continue Without Interruption – Consumers, Insurance Carriers, Brokers and Agents Will See No Changes
TAMPA, Fla., May 23, 2023 – Benefytt Technologies, Inc. (“Benefytt” or “the Company”), a health insurance technology company and leading distributor of Medicare-related health insurance plans, today announced that it has commenced a voluntary proceeding under Chapter 11 of the U.S. Bankruptcy Code (“Chapter 11”) in the United States Bankruptcy Court for the Southern District of Texas (the “Court”). In advance of the filing, the Company executed a Restructuring Support Agreement (“RSA”) supported by both the Company’s lenders and major equity holders. The Company expects to complete the financial reorganization and emerge from bankruptcy within 90 to 120 calendar days.
Consumers who have used Benefytt products to access health insurance plans will see no changes to their coverage as a result of this filing, as any premiums are paid directly to the health insurance carriers. Through this process, employees should see no changes to pay or benefits. The Company is expected to operate as usual, providing consumers, brokers and agents with access to a range of health insurance plans and insurance carriers with innovative technologies through which they can engage with their existing and prospective customers. Benefytt has filed customary motions with the Court seeking a variety of “first day” relief measures, including authorization to pay employee wages and benefits in the ordinary course of business.
In addition to existing cash on hand, Benefytt has received commitments from funds affiliated with Madison Dearborn Partners (“MDP”) and certain co-investors of new capital in the form of debtor-in-possession (“DIP”) financing and an additional commitment of capital, as part of the RSA. Pending Court approval, this DIP financing and incremental investment, combined with cash flow generated by the Company’s ongoing operations, are expected to be sufficient to meet Benefytt’s needs throughout the restructuring process and to fund the go-forward business.
“By completing this process, we are creating a stronger financial foundation to support our future growth,” said Todd Baxter, Chief Executive Officer at Benefytt. “With recent strategic changes to our business model and revenue collection timeline, and a new, world-class management team established over the past year, Benefytt is taking action to lead our business into an exciting new chapter. Our filing is the next step in our ongoing work to create a stronger balance sheet and a reorganized corporate structure. We will have all the pieces in place for a fresh start and a successful future so we can better fulfill our mission of helping people thrive with innovative health insurance solutions for every stage of their lives.”
Upon completion of the Court-supervised recapitalization, the Company will emerge as two separate entities:
“We appreciate MDP’s continued support of Benefytt, as well as that of our lenders in this pre-arranged restructuring,” continued Mr. Baxter. “The two-entity model is designed to create a sustainable structure that ensures our continued strong relationships with insurance carriers, brokers and agents while continuing to serve all of our consumers and provides a platform to capitalize on the significant opportunities we see in the marketplace. I would like to thank our employees, carrier partners and customers for their continued support through this process as Benefytt takes an important step to position our company for long-term success.”
Jefferies LLC is serving as Benefytt’s investment bank, Ankura Consulting Group, LLC is serving as its restructuring advisor, and Kirkland & Ellis LLP is providing legal counsel to the Company. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor to MDP.
Benefytt Technologies, Inc. is a health insurance technology company that primarily engages in the development and operation of private e-commerce health insurance marketplaces, consumer engagement platforms, agency technology systems, and insurance policy administration platforms. By leveraging existing and emerging platforms and Technologies, the Company offers a range of Medicare-related insurance plans from many of the nation’s leading carriers as well as other types of health insurance and supplemental products that meet the needs of consumers.
Learn more about us at www.benefytt.com
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Sydney Isaacs / Meera Sundaresan
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