Filing Alert: GoHealth Chapter 11
GoHealth, Inc., a Chicago, IL-based health insurance marketplace and Medicare-focused digital health company, filed for Chapter 11 protection on June 07, 202...
GoHealth, Inc. and its debtor affiliates⁽¹⁾, a Chicago, IL-based health insurance marketplace and Medicare-focused digital health company, filed for Chapter 11 protection on Jun. 7 in the U.S. Bankruptcy Court for the District of Delaware.
The company traces its distress to its 2020 NASDAQ IPO (ticker "GOCO"), whose ~$6.6 billion valuation invited new entrants and intensified competition in the Medicare Advantage ("MA") e-broker space, prompting debt-funded investment in lead acquisition—including a 2021 refinancing and a $200 million incremental revolver—premised on policyholder-retention assumptions that proved overstated. Successive amendments raised pricing and tightened covenants while a post-COVID rise in LIBOR more than doubled the company's effective interest rate even as funded debt grew. Its Non-Agency Business, stood up in late 2022 to monetize Carrier marketing and one-time qualification fees, subsequently unraveled as rising medical costs outpaced CMS reimbursement, updated condition risk-score rules and ongoing FCA/AKS scrutiny eroded Carrier MA profitability, and Carriers curtailed marketing spend and broker distribution—sharply reducing demand for the company's higher-value offering.
The 2024 AEP skewed toward lower-margin Agency Business, which carries year-one commissions below customer acquisition cost (“CAC”), swelling the company’s renewal-driven “Backbook Asset” while depressing Q1 2025 liquidity and culminating in a going-concern disclosure in the notes to its Q2 2025 Form 10-Q filed May 16, 2025. A May 1, 2025 DOJ Complaint-in-Intervention under the False Claims Act and Anti-Kickback Statute—which the company denies and is defending—further strained constrained liquidity. An August 2025 super-priority financing (a $117 million facility comprising $82 million of new money and a ~$35 million revolver roll-up) paired with the 14th Amendment enabled the Company to secure financial statements free of a going-concern qualification ahead of the 2025 AEP, but a Moelis-led marketing and merger process failed to yield a near-term third-party transaction by late February 2026, prompting a pivot to a lender-led change of control that preserved value for junior stakeholders.
The prepackaged plan—supported by 100% of prepetition lenders, 61% of Class A common holders, and over 99% of GoHealth Holdings interests—transitions ownership to the secured lenders, converting approximately $174 million of Super-Priority loans into second-out take-back term loans and approximately $588 million of First Lien loans into third-out take-back term loans, while leaving general unsecured claims and preferred equity unimpaired through reinstatement and funding a $10 million cash Equity Recovery for common holders via a new $20 million exit facility. With no meaningful unencumbered cash, the debtors forgo a DIP and will instead fund the cases through the consensual use of cash collateral—projecting a remaining balance of approximately $7 million after four weeks and $6 million after six weeks—and target a combined disclosure statement and confirmation hearing 39 days after the Petition Date to emerge ahead of the August 1 pre-AEP window and the 2026 AEP.
The company reports $917.9 million in assets and $986.7 million in liabilities. The filing indicates that there will be funds available for distribution to unsecured creditors. The case number is 26-10914.
⁽¹⁾ For a complete list of debtor entities, see the Chapter 11 Debtors table.
Chapter 11 Debtors
Top Unsecured Claims
Key Parties
Counsel:
- Laura Davis Jones
Pachulski Stang Ziehl & Jones LLP
Email: ljones@pszjlaw.com
Restructuring Counsel:
- Kirkland & Ellis LLP
- Kirkland & Ellis International LLP
Financial Advisor:
- Alvarez & Marsal North America, LLC
Signatories:
- Vijay Kotte – Authorized Signatory
Claims Agent:
- Donlin, Recano & Company, Inc.
Equity Security Holders:
- CB Blizzard Lower Holdings A, L.P. – Class A Common: 16.3%
- PSP Investments Credit USA LLC – Class A Common: 10.1%
- CB Blizzard Holdings C, L.P. – Class A Common: 8.8%
- Blue Torch Credit Opportunities Fund III LP and affiliated funds – Class A Common: 8.7%
- Vijay Kotte – Class A Common: 5.7%
- Redwood Master Fund Ltd. and affiliated funds – Class A Common: 5.5%
- NVX Holdings, Inc. – Class A Common: <1.0%; Class B Common: 49.0%
- CB Blizzard Lower Holdings B, L.P. – Class B Common: 42.7%
- Blizzard Management Feeder, LLC – Class B Common: 7.9%
- Anthem Insurance Companies, Inc. – Series A Preferred: 70.0%
- GH 22 Holdings, Inc. – Series A Preferred: 30.0%