Avadim Health Inc., which makes topical foams, sprays and towelettes under Theraworx, Phuel and Combat One brands, filed for bankruptcy protection with secured lenders led by Hayfin Capital Management LLP positioned as the lead bidders in a sale process, WSJ Pro Bankruptcy reported. The Asheville, N.C.-based business filed for chapter 11 Monday in the U.S. Bankruptcy Court in Wilmington, Del., to sell itself after a planned public offering in early 2020 was called off. Despite quadrupling sales in recent years, Avadim never turned a profit, owes secured lenders and bondholders nearly $102 million and faces a “severe liquidity crisis,” court papers said. The leading bid from lenders would put them in control of the business in exchange for roughly $70 million in debt forgiveness. Privately held Avadim was founded in 2007 by Stephen Woody, the company’s chief executive officer and one of the largest of its 1,300 shareholders. The business does its own research and development, and makes its key products in-house in Asheville. Avadim has been trying to restructure its secured debt and to raise capital, but losses widened to $53.6 million in 2020, from $34.8 million the year before, Chief Restructuring Officer Keith Daniels said in a court filing.
