Exactech Preparing for Potential Chapter 11 Filing as Soon as Next Month

Reporting: Patrick Fitzgerald, Harvard Zhang Exactech is preparing for a possible Chapter 11 filing that could come as soon as mid-November, according to sources. Plans are not final and could change, and the company may execute a transaction on an out-of-court basis, the sources said. The TPG-backed developer and marketer of orthopedic implant devices, advised by Ropes & Gray, Centerview Partners and Riveron Consulting, has been weighing an in-court restructuring on account of deteriorating liquidity, fast-approaching maturities and ongoing litigation related to faulty joint replacement devices. Lenders are working with Milbank and Evercore, as reported. Exactech was downgraded by Moody’s Investors Service late last month on account of “the high probability of a major restructuring or default due to the company’s substantial debt burden and weak earnings capacity.” “The downgrade comes in the wake of Exactech’s impending revolver and term loan maturities, along with a consistent negative cash flow due to high capital expenditures and recall-related expenses,” Moody’s added. In early March, a New York federal court presiding over the Exactech orthopedic products liability multidistrict litigation dismissed the plaintiffs’ tort claims against Exactech’s parent, Osteon Holdings, and various affiliates, including TPG, originally filed in 18 states. Claims originally filed in[...]