The group of lenders of LifeCare Holdings, Inc. agreed to acquire LifeCare Holdings, Inc. from Carlyle Partners IV, L.P. of The Carlyle Group LP (NasdaqGS:CG) and other investors for $320 million on December 11, 2012. LifeCare has entered into a commitment for a $25 million debtor in possession financing facility arranged by JPMorgan Chase, which is subject to court approval. In case of termination of the transaction due to Carlyle Group and other investors, Carlyle Group will pay $1 million as termination fee. The transaction is subject to court approval, approval of HSR Act, subject to the satisfaction of usual and customary conditions, including obtaining all necessary regulatory consents. The transaction is subject to be completed within 6 months from the date of announcement. As of January 28, 2013, U.S. Bankruptcy Court approved the deal on January 25, 2013. The competing bidders would have to offer $3.75 million more than the stalking horse bidder by a March 13, 2013. During the auction, bids will increase in $1 million increments.

The deadline for receipt of bids was March 13, 2013, and no other qualified bids were received. A hearing to approve the sale is scheduled for April 2, 2013, and the proposed transaction is expected to be completed the summer 2013. The transaction was approved by bankruptcy court on April 19, 2013.

Anthony W. Clark, Kenneth S. Ziman and Felicia Gerber Perlman of Skadden, Arps, Slate, Meagher & Flom, L.L.P. acted as legal advisors for LifeCare Holdings, Inc. Ira S. Dizengoff and Scott Alberino of Akin Gump Strauss Hauer & Feld LLP acted as legal advisor for buyers. Rothschild acted as financial advisor for LifeCare Holdings. Sandeep Qusba, Morris Massel and Terry Sanders of Simpson Thacher & Bartlett LLP and Mark D. Collins and L. Katherine Good of Richards, Layton & Finger PA acted as legal advisor for JPMorgan Chase. Rosemary Plorin of Lovell Communications Inc. acted as public relations advisor in the transaction.