21st Century Oncology Seeks Bankruptcy Court Protection
America’s largest operator of cancer treatment centers, 21st Century Oncology, has filed for bankruptcy as its debt burden runs out of control. The Florida-based healthcare company sought bankruptcy protection at a New York bankruptcy court in May.
The bankruptcy was highly expected after the company failed to make interest payments on its debt last November. The cash crunch has been a result of years of tumbling revenue. In addition, the company has been bleeding cash to fight and settle many recent lawsuits filed against it.
21st Century Oncology is now negotiating with its creditors to have its debt burden cut down so the company can keep its medical centers open to cancer patients across the country.
The company has 144 cancer treatment centers operating in the United States, and 34 centers operating in Latin America, which adds up to a total of 180 centers.
21st Century Oncology claims to be the largest provider of cancer treatment services in the world, with a total workforce of 3,600 employees working in the U.S. and abroad.
The company’s debt burden now stands at over $1.0 billion, but it could be slashed in half, to roughly $500.0 million, if the courts adjudicate in the company’s favor.
21st Century Oncology was founded more than 30 years ago, and it remained a public entity until 2008. That year, the company was bought out for $1.0 billion, and it has remained private since then.
In 2014, the company’s management team mulled over raising funds by once again taking the company public. However, the plan got deferred until 2016, when the company finally decided to take it off the table altogether.
In March of this year, the company’s CEO stepped down and was replaced by Paul Rundell as interim CEO, who took charge to steer the company away from piling up further losses.
Rundell cites rising costs and falling revenue per cancer patient as the primary reason behind its woes, which have been made worse as the company incurs hefty litigation-related expenses.
Meanwhile, political uncertainty surrounding the future of medical care in the U.S. following the planned repeal and replacement of the Affordable Care Act (alternatively called Obamacare), is causing a stir in the American healthcare sector.
21st Century Oncology stands to lose more money, should the U.S. Senate approve the Trump administration’s repeal and replacement of Obamacare, since insurance reimbursements will fall.
“21st Century Oncology Files for Chapter 11 Bankruptcy”, The Wall Street Journal, May 25, 2017.
“Cancer treatment firm 21st Century Oncology files for bankruptcy”, CNBC, May 26, 2017.