A federal bankruptcy court judge has approved the sale of Wellpath's behavioral health division.
In November, Wellpath, one of the largest providers of physical and mental healthcare in U.S. prisons, filed for bankruptcy. In a Nov. 12 news release, the company said it planned to sell its recovery division to a group of its lenders.
U.S. Bankruptcy Judge Alfredo Perez approved the sale Jan. 8, according to a recording of the court proceedings. The division was sold for $395 million, wiping out more than half of the company's $644 million in debt.
Wellpath Recovery Solutions operates several civil and forensic inpatient hospitals in seven states and provides partial hospitalization and outpatient programs. The division also operates two residential treatment facilities in Southern California.
The company will also consider selling its jail and prison care divisions, the Miami Herald reported in November.
Wellpath has more than 13,000 employees, according to the Miami Herald, and operates 420 facilities in 39 states.