Page 9 of 12 – SEC Filing
SCHEDULE 13D
The reporting persons named in Item 2 below are hereby jointly filing this Schedule 13D (this “Statement“) because due to certain affiliates and relationships among the reporting persons, such reporting persons may be deemed to beneficially own the same securities directly acquired from the Issuer (defined below) by one of the reporting persons. In accordance with Rule 13d-1(k)(1)(iii) promulgated pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act“), the reporting persons named in Item 2 below have executed a written agreement relating to the joint filing of this Schedule 13D (the “Joint Filing Agreement“), a copy of which is annexed hereto as Exhibit 99.1.
| Item 1. | Security and Issuer |
This Statement is being filed with respect to the Class A common stock, $0.01 par value per share (the “Common Stock“), of Adeptus Health Inc., a corporation organized under the laws of the state of Delaware (the “Issuer“). The address of the principal executive offices of the Issuer is:
Adeptus Health Inc.
2941 Lake Vista Drive
Lewisville, TX 75067
| Item 2. | Identity and Background |
| (a) | This statement is filed by |
| (i) | Each of Debello Investors LLC, Wexford Focused Investors LLC and Wexford Spectrum Investors LLC (collectively, the “Purchasing Entities“), each of which is a Delaware limited liability company, with respect to the shares of Common Stock owned by them; |
| (ii) | Wexford Capital LP (“Wexford Capital“), a Delaware limited partnership, which is the manager of the Purchasing Entities; |
| (iii) | Wexford GP LLC (“Wexford GP“), a Delaware limited liability company, which is the general partner of Wexford Capital; |
| (iv) | Charles E. Davidson (“Mr. Davidson“), the Chairman and a managing member of Wexford GP; and |
| (v) | Joseph M. Jacobs (“Mr. Jacobs“), the President and a managing member of Wexford GP. |
The foregoing persons are hereinafter sometimes collectively referred to as the “Reporting Persons”. All disclosures herein with respect to any Reporting Person are made only by such Reporting Person. Any disclosures herein with respect to persons other than the Reporting Persons are made on information and belief after making inquiry to the appropriate party.
| (b) | The address of the principal business and principal office of the Purchasing Entities, Wexford Capital and Wexford GP is c/o Wexford Capital LP, 411 West Putnam Avenue, Suite 125, Greenwich, CT 06830 and 777 South Flagler Drive, Suite 602 East, West Palm Beach, FL 33401. The address of the principal business and principal office of Charles E. Davidson and Joseph M. Jacobs is c/o Wexford Capital LP, 777 South Flagler Drive, Suite 602 East, West Palm Beach, FL 33401. |
| (c) | Each of Purchasing Entities is a private investment fund formed for the purpose of making various investments. Wexford Capital is an investment advisor registered with the Securities and Exchange Commission (“SEC“), and manages a series of investment funds. Wexford GP is the general partner of Wexford Capital. Messrs. Davidson and Jacobs are the managing members of Wexford GP. |
| (d) | None of the Reporting Persons has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). |
| (e) | None of the Reporting Persons has, during the last five years, been a party to civil proceeding of a judicial administrative body of competent jurisdiction and, as a result of such proceeding, was, or is subject to, a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or state securities laws or finding any violation with respect to such laws. |
| (f) | Each of Debello Investors LLC, Wexford Focused Investors LLC, Wexford Spectrum Investors LLC and Wexford GP LLC is a Delaware limited liability company. Wexford Capital is a Delaware limited partnership. Messrs. Davidson and Jacobs are each United States citizens. |
| Item 3. | Source and Amount of Funds or Other Consideration. |
The shares of Common Stock beneficially owned by the Reporting Persons were acquired through open market purchases using the general funds of the Purchasing Entities, which funds were contributed by investors in such entities. Such shares are held by the Purchasing Entities.
| Item 4. | Purpose of Transaction. |
The Purchasing Entities are investment funds affiliated with and managed by Wexford Capital. Wexford Capital is an SEC registered investment advisor with over $3 billion of assets under management and a background that includes over two decades of investing in distressed situations, including companies that have filed or are considering filing chapter 11 reorganization proceedings. Wexford and its affiliated investment funds have broad experience with distressed investment situations, including as a sponsor of plans of reorganization, service on creditors’ committees, participation as a debtor in possession lender and numerous other matters.
The Purchasing Entities acquired the shares of the Issuer’s Common Stock reported on this Schedule 13D after examination of the recent events regarding the Issuer and analysis of the Issuer’s financial condition and capital structure. The Reporting Persons’ preliminary view is that while the Issuer may need to restructure its debt, such a restructuring should be able to be accomplished either in or outside of a chapter 11 reorganization proceeding, and that with an appropriate capital structure, the fundamentals of the Issuer’s business appear to be sound. Depending upon the actions taken by the Issuer and the lenders under the Issuer’s credit agreement as amended, the Reporting Persons may consider taking an active role in the discussions regarding the restructuring of the Issuer’s financial obligations and balance sheet and the steps that the Issuer should take going forward with respect to the operation of its business. If appropriate, the Reporting Persons may also consider making a proposal to provide debtor in possession financing or other financial support to the Issuer.
The Purchasing Entities intend to review their investment in the Issuer’s shares on a continuing basis. The Purchasing Entities may take additional actions, including acquiring or selling shares depending on a number of factors, including without limitation, the Issuer’s financial position and strategy, the steps taken and progress achieved by the Issuer in restructuring its debt and balance sheet, the price level of the shares and general economic and industry conditions.
| Item 5. | Interest in Securities of the Issuer |
The aggregate number and percentage of shares of Common Stock beneficially owned by the Reporting Persons (on the basis of 16,395,599 shares of Common Stock issued and outstanding as of November 7, 2016 as reported in the Issuer’s Form 10-Q filed with the SEC on November 9, 2016) are as follows:
| Debello Investors LLC | |||||
| a) | Amount beneficially owned: 343,000 | Percentage: 2.09% | |||
| b) | Number of shares to which the Reporting Person has: | ||||
| i. | Sole power to vote or to direct the vote: | 0 | |||
| ii. | Shared power to vote or to direct the vote: | 343,000 | |||
| iii. | Sole power to dispose or to direct the disposition of: | 0 | |||
| iv. | Shared power to dispose or to direct the disposition of: | 343,000 | |||
| Wexford Focused Investors LLC | |||||
| a) | Amount beneficially owned: 25,000 | Percentage: 0.15% | |||
| b) | Number of shares to which the Reporting Person has: | ||||
| i. | Sole power to vote or to direct the vote: | 0 | |||
| ii. | Shared power to vote or to direct the vote: | 25,000 | |||
| iii. | Sole power to dispose or to direct the disposition of: | 0 | |||
| iv. | Shared power to dispose or to direct the disposition of: | 25,000 | |||
| Wexford Spectrum Investors LLC | |||||
| a) | Amount beneficially owned: 1,032,000 | Percentage: 6.29% | |||
| b) | Number of shares to which the Reporting Person has: | ||||
| i. | Sole power to vote or to direct the vote: | 0 | |||
| ii. | Shared power to vote or to direct the vote: | 1,032,000 | |||
| iii. | Sole power to dispose or to direct the disposition of: | 0 | |||
| iv. | Shared power to dispose or to direct the disposition of: | 1,032,000 | |||
| Wexford Capital LP | |||||
| a) | Amount beneficially owned: 1,400,000 | Percentage: 8.54% | |||
| b) | Number of shares to which the Reporting Person has: | ||||
| i. | Sole power to vote or to direct the vote: | 0 | |||
| ii. | Shared power to vote or to direct the vote: | 1,400,000 | |||
| iii. | Sole power to dispose or to direct the disposition of: | 0 | |||
| iv. | Shared power to dispose or to direct the disposition of: | 1,400,000 | |||
| Wexford GP LLC | |||||
| a) | Amount beneficially owned: 1,400,000 | Percentage: 8.54% | |||
| b) | Number of shares to which the Reporting Person has: | ||||
| i. | Sole power to vote or to direct the vote: | 0 | |||
| ii. | Shared power to vote or to direct the vote: | 1,400,000 | |||
| iii. | Sole power to dispose or to direct the disposition of: | 0 | |||
| iv. | Shared power to dispose or to direct the disposition of: | 1,400,000 | |||
| Charles E. Davidson | |||||
| a) | Amount beneficially owned: 1,400,000 | Percentage: 8.54% | |||
| b) | Number of shares to which the Reporting Person has: | ||||
| i. | Sole power to vote or to direct the vote: | 0 | |||
| ii. | Shared power to vote or to direct the vote: | 1,400,000 | |||
| iii. | Sole power to dispose or to direct the disposition of: | 0 | |||
| iv. | Shared power to dispose or to direct the disposition of: | 1,400,000 | |||
| Joseph M. Jacobs | |||||
| a) | Amount beneficially owned: 1,400,000 | Percentage: 8.54% | |||
| b) | Number of shares to which the Reporting Person has: | ||||
| i. | Sole power to vote or to direct the vote: | 0 | |||
| ii. | Shared power to vote or to direct the vote: | 1,400,000 | |||
| iii. | Sole power to dispose or to direct the disposition of: | 0 | |||
| iv. | Shared power to dispose or to direct the disposition of: | 1,400,000 | |||
The total shares of Common Stock reported as beneficially owned by each of Wexford Capital, Wexford GP, Mr. Davidson and Mr. Jacobs include the shares of Common Stock reported as beneficially owned by the Purchasing Entities. Wexford Capital may, by reason of its status as manager of the Purchasing Entities, be deemed to own beneficially the shares of Common Stock of which the Purchasing Entities possess beneficial ownership. Wexford GP may, by reason of its status as general partner of Wexford Capital, be deemed to own beneficially the securities of which the Purchasing Entities possess beneficial ownership. Each of Messrs. Davidson and Jacobs may, by reason of his status as a controlling person of Wexford GP, be deemed to own beneficially the shares of Common Stock of which the Purchasing Entities possess beneficial ownership. Each of Wexford GP, Wexford Capital, Davidson and Jacobs, shares the power to vote and to dispose of the shares of Common Stock beneficially owned by the Purchasing Entities. Each of Wexford Capital, Wexford GP, Davidson and Jacobs disclaims beneficial ownership of the shares of Common Stock owned by the Purchasing Entities and this report shall not be deemed as an admission that they are the beneficial owner of such securities except, in the case of Messrs. Davidson and Jacobs, to the extent of their respective personal ownership interests in any of the members of the Purchasing Entities.
(c) Except as set forth in Item 3 above, the Reporting Persons have not effected any transactions in the Common Stock during the 60 days preceding the date of this Schedule 13D.
(d) Not applicable
(e) Not applicable
| Item 6. | Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer |
Not applicable.
| Item 7. | Material to be Filed as Exhibits |
99.1 Joint Filing Agreement (filed herewith)
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