LifeCare secures waivers from some lenders, noteholders until Nov. 1

By Susanna Moon

Chicago, Sept. 18 - LifeCare Holdings, Inc. said it obtained loan waivers from its senior secured lenders and more than a majority of its senior subordinated noteholders.

The waivers, which expire on Nov. 1, provide more time to continue discussions with its creditors, potential buyers and other interested parties as it pursues longer-term solutions for its debt structure, according to a company press release.

The senior secured lenders waived cross-defaults arising from the failure to make the interest payment due Aug. 15 on its senior subordinated notes.

The company also obtained a waiver from holders of more than 70% of its senior subordinated notes due 2013 related to the failure to make the above-referenced interest payment.

The terms of the waivers include additional reporting requirements to the lenders and their advisers and certain restrictions on non-ordinary course payments, among other terms.

"We appreciate this action from our creditors as we continue discussions regarding our capital structure and the company's strategic alternatives," LifeCare chairman and chief executive officer Phillip B. Douglas said in the release.

"We continue to evaluate various strategic options to restructure our debt and position the company for future growth."

There can be no assurances that a resolution can be reached before the termination of the waivers, the release noted.

LifeCare is a Plano, Texas, health care consulting and management services company.

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