Prison Health-Care Firm Wellpath Prepares Bankruptcy Filing

Wellpath Holdings Inc., one of the largest providers of health-care services to prisons and jails across the US, is preparing to file for bankruptcy after struggling with an elevated debt load and high labor costs, according to people with knowledge of the matter.

The company, owned by H.I.G. Capital, failed to repay a credit facility that expired on Oct. 1 and deferred interest payments on its other debt after entering a forbearance agreement with lenders, according to Moody’s Ratings. The credit grader said it views the actions as a default.

A bankruptcy filing, which would keep the company ...