Dentix emerges from bankruptcy. The Commercial Court Number 2 of Madrid confirmed that the KKR investment fund respected its part of the agreement reached last February with the bankruptcy trustee and paid the debts of the rest of the creditors, which made it possible to put an end to the bankruptcy of Dentix Health Corporation (DHC), the parent company, and its subsidiaries, which began in November 2020 and led to the closure of dental clinics and the dismissal of 2,600 workers.
The closure of the competition, which is definitive, as there is no appeal against this decision, became effective on October 16, as this newspaper learned, after verifying that there were no outstanding debts to be paid. “The bankruptcy proceedings concerning the debtor Dentix Health Corporation SL are declared concluded to the satisfaction of the creditors.” Likewise, it was agreed to dismiss the lawyer Elíseo M. Martínez, managing partner of the Ius+Aequitas Trial Lawyers firm, from the position of bankruptcy trustee, once “the payments to the creditors whose credits he has previously reported” have been accredited and after having given the green light to the corporate accounts presented by the trustee.
The lawyer and the private capital Nine months ago they signed an agreement to put an end to all legal disputes, such as the complaint to the National Court (already closed) for fraud and accounting crimes against the chain’s top management. low cost of dental treatments led by its founder, Ángel Lorenzo. Under the pact, KKR promised to pay a maximum of 250 million euros which would allow it to “satisfy the creditors of its creditors and exit the state of insolvency” and to liquidate all claims against the assets and privileged members of these companies, including debts to workers and public organisations. Legal sources have specified that the amount paid does not reach the expected ceiling, since a large part of Dentix’s debt was contracted with that company.
The “best deal”, according to the judge
The commercial judge rejected the opposition raised by some creditors, such as Abanca, BidCo or the private equity fund Advent (majority shareholder of Vitaldent, which took charge of the treatment already paid to Dentix) and approved this agreement last May because he believed it was the “best possible agreement”, since it was the result of a “regulated mediation, of extraordinary duration, with the assistance of experts and an experienced international mediator”, in reference to Clifford J. Hendel.
«From a material point of view, there is no reason to believe that an agreement which brings the parent company of the group out of the bankruptcy situation with a liability declared in the definitive texts presented by the bankruptcy administration, on 11 December 2024, of 214,764,257.85 euros of bankruptcy credits and 1,312,052.17 euros of credits towards the inheritance, and allows the payment of the credits towards the inheritance and preferential subsidiaries for a very significant amount of up to 73,955,412.98 euros is not the best possible agreement”, indicated the magistrate who handled the bankruptcy proceedings.
The agreement was reached more than a year after the bankruptcy trustee had indicated the American investment fund as “guilty” of the failure of the clinics, ensuring that KKR’s refusal in February 2020 to enter into the capital of Dentix represented a violation of the investment contract. The company had been financing the dental group since 2016 and was supposed to become a majority shareholder with the commitment to contribute 20 million euros and capitalize 160 million in debt, but in the end it backed out when it was found that the company’s real situation was not as estimated.
KKR’s last-minute decision motivated the opening of several legal fronts and brought the company to the financial situation it has been in for five years. For Elíseo M. Martínez, the resignation damaged the accounts of the dental clinics and for this reason he asked for compensation of almost 1,000 million euros. But with the settlement the requested compensation was not assessed by a judge and the lawsuits were closed.
