Exactech, a Gainesville, Fla.-based medical device maker, filed for Chapter 11 bankruptcy on Oct. 29 and has entered a restructuring agreement to sell its assets to a group of existing investors.
The move comes as the company faces more than 2,000 state and federal patient lawsuits over its knee, hip and shoulder implants that were voluntarily recalled in 2021 and 2022.
Four notes:
- Bankruptcy proceedings are moving through the District Court of Delaware. In a statement, Exactech said it has reached a sale agreement with its lenders, which will provide $85 million in additional financing to fund company operations through the restructuring process.
- The move pauses lawsuits from thousands of patients who are seeking damages related to alleged complications from recalled implant devices, according to a KFF Health News report. In 2021, Exactech began a series of recalls stemming from a packaging defect that did not fully protect the products from deterioration. The recalls spurred a pile of lawsuits, with many patients alleging complication and failure rates from implants that wore out prematurely. Exactech denies the allegations and, in court filings, said efforts to settle the cases with plaintiffs have stalled.
- Exactech emphasized that its operations will continue as normal throughout the bankruptcy proceedings. It will continue manufacturing and providing medical devices, as well as its focus on research and development.
"Our team has delivered strong performance and positive growth in 2024, and we are confident in the trajectory of our business," Darin Johnson, the company's president and CEO, said in a statement. "However, despite the strength of the underlying business, we face unsustainable liabilities associated with knee and hip litigation related to the packaging recalls we voluntarily initiated between 2021 and 2022. We take our commitment to patient well-being very seriously and have provided substantial out-of-pocket patient reimbursements and surgeon support for related expenses.
The process we are commencing today is intended to help us create a stronger foundation for long-term growth with an improved balance sheet and new capital as well as ensure that we can continue providing innovative, industry-leading implants for surgeons and their patients for years to come."
- Exactech is a global medical device manufacturer. Its products — which include joint replacement implants, surgical instruments and technologies — are distributed in more than 30 countries.