UpHealth, a global digital health company, announced that its subsidiary, UpHealth Holdings, filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.
The Chapter 11 filing follows the Sept. 14 decision by a trial court in New York to grant summary judgment in favor of Needham & Company in a lawsuit unrelated to the company’s operations.
UpHealth CEO Sam Meckey said, “Following the summary judgement, we immediately initiated a comprehensive review of our options, and determined that voluntarily filing for Chapter 11 is necessary to mitigate the financial impact of the trial court’s decision. We do not expect this announcement to have any impact on our operations or on the work we are doing to deliver technology-enabled services to our customers. We remain confident in the future prospects of our business, and are taking this proactive step so that we may best protect the interests of our stakeholders and achieve a fair resolution of this matter through an appeals process of the Needham judgment.”
The legal dispute stems from UpHealth Services’ hiring Needham & Company for financial advisory and placement purposes. The trial court in New York issued a decision and order last week, favoring Needham by granting them summary judgment. As a result, the court ruled that Needham is entitled to receive fees totaling more than $31 million plus interest. Read more.
