PE-Backed Prison Health Firm Wellpath Declares Bankruptcy (2)

Wellpath Holdings Inc., one of the largest providers of health-care services to prisons and jails across the US, has filed bankruptcy after grappling with escalating labor and legal costs.

The H.I.G. Capital-backed firm, which has about $644 million of funded debt, filed for Chapter 11 in the US Bankruptcy Court for the Southern District of Texas. In a separate statement, Wellpath said it has secured a $522 million debtor-in-possession financing facility from some lenders and plans to sell some businesses.

These transactions are expected to reduce the total debt of Wellpath’s correctional healthcare business by about $550 ...