American HomePatient Inc., one of the nation’s largest home health care providers, has secured an agreement with its senior debt holders and its largest stockholder, an investment fund managed by Highland Capital Management, to move toward private holding, followed by restructuring of American HomePatient’s senior debt.

Per the agreement, the company will seek shareholder approval to reincorporate in Nevada and commence a tender offer to acquire all outstanding shares of stock not held by Highland managed accounts for $0.67 per share. Upon completion of this transaction, American HomePatient stock will no longer be publicly traded.

“We are pleased to have an agreement that provides fair value to our stockholders, extends our relationship with our debt holders, and allows American HomePatient and its employees to continue to focus on providing critical services to our customers,” Joseph F. Furlong, president and CEO of American HomePatient stated in the press release.

American HomePatient previously announced that approximately $226 million was due for repayment by August 1, 2009, and that it was in default because it could not repay or refinance at that time. Since the announcement, American HomePatient has continued operations through the establishment of a series of negotiated short-term forbearance agreements in which the lenders voluntarily agreed to take no actions against the company because of its inability to repay the debt.

If the reincorporation isn’t approved, the tender offer and subsequent debt restructuring will not occur either. If the tender offer is completed, the company’s senior secured debt will be restructured with a new four-year term; but if the tender offer is not completed, American HomePatient will remain in default of its obligations to its senior lenders, at which time the company said it may file for Chapter 11 bankruptcy protection.

On June 21, 2010, American HomePatient, at its annual meeting of stockholders, shareholders of record on May 14, 2010, will be eligible to vote on the proposal for reincorporation. The company said that a Highland managed account with a 48 percent stake of the outstanding shares has agreed to vote all of its shares in favor of the reincorporation plan.

The company also today announced that it has retired $10,157,078 of its secured debt held by a single lender, at a 15-percent discount.