NEW YORK, Oct 29 (Reuters) - Medical implant

manufacturer Exactech filed for bankruptcy on Tuesday in

Delaware, seeking to sell its assets and resolve about 2,600

lawsuits over recalled knee, hip and shoulder implants.

Exactech, which is owned by private equity firm TPG, entered

bankruptcy with $352 million in debt and a sale agreement that

would turn over the company's assets to its lenders. The sale

agreement is subject to higher offers, and it is supported by

95% of the company's lenders, according to court filings.

Exactech said that high interest payments and litigation

expenses began cutting into the company's cash flow in mid-2023,

threatening to derail an otherwise-strong business. Exactech

spent $20 million on recalls and litigation expenses in the past

12 months.

The Gainesville, Florida-based company makes shoulder, hip,

knee and ankle implants, as well as surgical imaging devices.

Exactech operates four manufacturing facilities in Gainesville

and Sarasota, Florida, and Gieres, France, and it has 900

employees worldwide.

Most of Exactech's legal troubles stemmed from a 2021

voluntary recall of implant devices due to "non-conforming

packaging" which did not fully protect the devices from exposure

to oxygen.

The company said that the defective packaging did not

meaningfully impact the safety of its implants, but the recall

spurred about 2,600 lawsuits alleging that the defective

packaging had caused oxidation in some devices, shortening their

lifespan and requiring patients to undergo "revision surgeries"

to address flawed or failing implants.

Over 1,840 lawsuits were centralized in a federal court in

Brooklyn, New York, and more than 740 lawsuits were consolidated

in Florida state court. In the federal litigation, four cases

have been selected for bellwether trials, with jury selection

scheduled to begin in 2025.

Exactech has disputed those allegations and said that its

efforts to settle the cases have not resulted in a deal.

The company is also facing a 2018 whistleblower lawsuit in

Alabama federal court alleging that the company defrauded the

federal government by seeking reimbursement for misbranded and

defective knee devices and for knee implants that were not

medically reasonable and necessary. The company disputes the

allegations and said it has tried to reach a settlement with the

U.S. Department of Justice and the whistleblowers.

Exactech's lenders have agreed to provide $85 million in new

financing to see the company through its bankruptcy

restructuring, according to court documents.

The case is In re: Exactech Inc., U.S. Bankruptcy Court for the

District of Delaware, No. 24-12441

For Exactech: Ryan Dahl and Benjamin Rhode of Ropes & Gray

LLP, among others.

Read more:

Exactech orthopedic implant lawsuits sent to federal judge

in Brooklyn