Boca Raton, Fla.-based Path Medical has filed for Chapter 11 bankruptcy with $86.5 million in liabilities, South Florida Business Journal reported Sept. 2.
The 24-clinic practice, which focuses on the treatment of acute trauma and accident-related injuries, cited the "effects of the COVID-19 pandemic" as the reason it initiated the debt restructuring plan.
Revenue declined during the pandemic as many of its patients are those involved in auto accidents and there have been fewer people driving, an attorney for Path Medical said, according to the report.
Path Medical has 281 employees, and all of its physicians at chiropractic and orthopedic centers are independent contractors.
The practice plans to continue to operate normally during bankruptcy proceedings and has received court approval to continue paying its employees, South Florida Business Journal reported.
Path Medical leases 17 clinics in South Florida and seven more in the Tampa Bay area. It posted $30.1 million in 2021 revenue through August and $45.7 million in revenue in 2020, according to the report.
The practice said it is profitable based on operations, but its debt service payments were too much.
According to the case summary, Path Medical has assets of $30 million and liabilities of $86.5 million, with the biggest claims from creditors coming from Sierra Income Corp. ($20 million), Comvest Capital III ($15.4 million), Northport TRS ($15.4 million) and PhenixFIN Corp. ($15.1 million).
"Just as I am confident the world will manage and emerge more resilient from COVID-19, I am confident Path Medical will as well," Path Medical CEO Manny Fernandez said. "We owe it to our patients and our staff."