Benefytt Files Bankruptcy After FTC ‘Sham’ Insurance Allegations

Benefytt Technologies Inc., a health insurer that struggled to sign up new customers after settling allegations it tricked individuals into buying junk coverage, filed for bankruptcy with a plan that provides fresh cash.

The company has broad lender support for a restructuring deal, Benefytt lawyer Jack Luze said Tuesday in court. The plan segments the company’s existing health contracts and intellectual property — both of which will be owned by top lenders — from Benefytt’s operating business, which will continue to be owned by private equity firm Madison Dearborn Partners and other investors that have agreed to inject about ...