Carbon Health Files Pre-Arranged Chapter 11, Secures $19.5 Million to Support Recapitalization or Sale

New updates have been reported about Carbon Health.

Carbon Health Technologies has initiated a pre-arranged Chapter 11 restructuring in the Southern District of Texas, backed by its existing lenders, to reset its capital structure and transition to new ownership. The company will run a dual-track, court-supervised process: one path to confirm a Chapter 11 plan built around a debt-for-equity swap, and a parallel process to market and potentially sell all or part of its assets. As part of the proceedings, Future Solutions Investments has committed up to $19.5 million in debtor-in-possession financing, intended to provide sufficient liquidity to fund operations, pay employees, providers, and vendors, and maintain patient care continuity throughout the restructuring and any sale. CEO Kerem Ozkay framed the move as a decisive step to fix balance sheet pressures that intensified after post-pandemic demand shifts and tighter healthcare capital markets, despite prior cost reductions and footprint rationalization.

Carbon Health emphasized that its clinics, virtual services, and healthcare software platform will continue operating without interruption during the Chapter 11 process, with patients retaining full access to care and medical records. Management expects the restructuring to yield a more sustainable capital structure and greater operational flexibility to pursue long-term growth once the process concludes, whether as a recapitalized standalone business or under new ownership. The company has filed customary first-day motions to continue business in the ordinary course and is working with Alvarez & Marsal as financial advisor and Pachulski Stang Ziehl & Jones LLP as bankruptcy counsel. Stakeholders can expect ongoing service levels to be maintained while the court-supervised process determines the ultimate ownership and financial profile of the business.