Lenders to KKR & Co.’s Envision Healthcare are considering litigation after the physician-staffing company moved roughly half its value beyond their grasp to secure a fresh source of financing, WSJ Pro Bankruptcy reported. Centerbridge Partners LP and Angelo Gordon & Co. led the first-lien financing deal, which moved an estimated $2.5 billion in collateral away from most of Envision’s existing lenders, the people familiar said. The term lenders, which met to consider legal options on Monday, said the deal came at their expense as the first-lien debt was mostly provided by third-party financial institutions that had little existing credit exposure to Envision. Envision said on Friday that it would borrow up to $1.3 billion in first-lien loans and $1.3 billion in second-lien loans that would help repurchase existing debt and reduce the company’s total indebtedness by roughly $600 million. The new borrowing is backed by AmSurg Corp., an ambulatory services unit that made up around half of Envision’s earnings in 2021, according to people familiar with the matter. Lenders to the company previously had collateral rights on AmSurg as part of their collateral package before the liens were released and roughly 80% of the subsidiary moved to a new affiliate. Lenders yesterday explored potential legal remedies against the company with law firm Kasowitz Benson Torres LLP. The original lenders allege that the transaction may not be allowed under the company’s debt documents. The lenders also questioned whether the company is still allowed to carry the same amount of outstanding debt in the remaining company after the assets are moved.
