London-based digital-first healthcare platform Babylon Health has filed for Chapter 7 bankruptcy for two subsidiaries — Babylon Healthcare and Babylon Inc. — as it shuts down core U.S. operations, according to documents filed Aug. 9 in a Delaware bankruptcy court.
The filing comes shortly after a planned combination Babylon's core operating subsidiaries with MindMaze, digital neurotherapy company, collapsed. Chapter 7 bankruptcy liquidates a company's assets, while Chapter 11 allows companies to continue to operate under a reorganization plan rather than restructure operations.
Both Babylon subsidiaries list hundreds of creditors with liabilities between $100 million and $500 million, according to the filing signed by COO Paul-Henri Ferrand. After administrative expenses are paid, only secured creditors — where the debt is backed by collateral — will be able to get paid.
Earlier this month, Babylon closed its Austin, Texas, headquarters, laid off 94 employees and abruptly canceled patient appointments.
The company reported a $63.2 million net loss (-20.3 percent net loss margin) in the first quarter, compared to a $29.1 million net loss (-10.9 percent net loss margin) for the same period in 2022. Net income for the period included a $78.8 million gain primarily related to Babylon going public via a blank-check company in the fall of 2021.
A meeting of Babylon's creditors is scheduled for Sept. 12, according to the filing.
Babylon did not respond to Becker's request for comment.