UpHealth subsidiary files for bankruptcy after unfavorable court ruling
Digital health company UpHealth Inc. (UPH) said Tuesday that its UpHealth Holdings subsidiary has declared for bankruptcy. UpHealth, which went public public on June 10, 2021 after the completion of its merger with special purpose acquisition company (SPAC) GigCapital2 Inc., said it expects to keep operating "in the normal course." The stock was down as much as 58% in the premarket before being halted, and has yet to trade since the opening bell. The bankruptcy filing comes after a trial court's decision on Sept. 14 to grant summary judgment in favor of Needham & Co. LLC in a lawsuit unrelated to the company's operations. The court's decision said Needham was entitled to fees of $31.35 million. "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," said Chief Executive Sam Meckey. "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." UpHealth's stock, which underwent a 1-for-10 reverse split in December, had plunged 39.9% year to date through Monday, while the S&P 500 had advanced 16.0%.
-Tomi Kilgore
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September 19, 2023 11:00 ET (15:00 GMT)
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