vol 17, num 1 | March 2020
 
 
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Health Care
 
AN ABI COMMITTEE NEWSLETTER
 
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► In This Issue:
 
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Health Care Committee Annual Report
Andrew C. Helman
 
Andrew C. Helman
Murray Plumb & Murray
Portland, Maine
 
Suzanne Koenig
 
Suzanne Koenig
SAK Management
Riverwoods, Ill.
 
 
With 2020 now well underway, we wanted to take a moment to reflect on the work of the Health Care Committee in 2019. Last year was a great year for the committee. We currently have 283 members and have been active in providing regular communication to them and developing meaningful programming throughout the year.

Here are a few highlights from the committee’s activities during 2019:

Newsletters
With contributions from committee members and others, we published 4 newsletters with 12 articles covering a wide range of topics — everything from how to handle patient health information in a sale to special issues unique to rural hospitals. These articles were timely and insightful — and they not only enhance the knowledge of those with experience in health care restructuring, they also serve as a valuable resource to restructuring professionals who encounter new issues. They are all available in the archives on the committee’s web page.

We appreciate the contributions of all of the authors who have helped to fill our newsletters with thoughtful and relevant content. They include Samuel R. Henninger (University of Tennessee College of Law); David N. Crapo (Gibbons, P.C.); Jeffrey R. Barber, Chad J. Hammons and Kristina M. Johnson (Jones Walker LLP); Laura Day DelCotto and Dean Langdon (DelCotto Law Group); Craig M. Geno (Law Office of Craig Geno); Adam M. Back and Jessica Middendorf (Stoll Keenon Ogden PLLC); Rob Vanderbeek and Brian Bonaviri (Grant Thornton LLP); Jameson J. Watts and Lynn H. Butler (Husch Blackwell LLP); Linda W. Knight (Gullett, Sanford, Robinson & Martin, PLLC); Stuart M. Brown, Thomas R. Califano and Rachel Nanes (DLA Piper LLP); Madlyn Gleich Primoff, Alexander Adams Rich and Henry Vaughn Hutten (Freshfields Bruckhaus Deringer LLP); and Ana Alfonso and Agustina Berro (Willkie Farr & Gallagher LLP).

 
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Skilled Nursing Facilities in Chapter 11 Bankruptcy Cases: A Case Study of Senior Care Centers LLC
Susan C. Mathews
 
Susan C. Mathews
Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
Houston
 
 
The health care industry continues to face financial challenges, as evidenced by more chapter 11 bankruptcy filings and closures by hospitals and other providers, including long-term-care facilities. Since late 2018, at least 19 hospitals around the country and owners or operators of more than 150 senior living facilities in Texas have filed for bankruptcy protection. The Senior Care Centers LLC (SCC) case, currently pending in Dallas, illustrates that although bankruptcy affords some relief for health care providers, it is not a panacea for debtors or their creditors. As seen in the SCC case, (1) lease issues may arise that can be complex, costly and time-consuming to litigate; (2) revenue may be withheld post-petition based on regulatory requirements in connection with transfers of the facility, notwithstanding the pendency of the bankruptcy case; (3) lease rejection does not result in the debtor operator immediately vacating the property in the case of a skilled nursing facility or assisted living facility; and (4) a debtor may have to reorganize around facilities it no longer wishes to operate.
 
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California Bankruptcy Court Rules that Provider Agreements Are Statutory Entitlements, Not Executory Contracts
Elizabeth J. Austin
 
Elizabeth J. Austin
Pullman & Comley, LLC
Bridgeport, Conn.
 
 
Verity Healthcare Assistance of California scored a major victory in the U.S. Bankruptcy Court for the Central District of California when the court ruled that provider agreements between hospitals owned by Verity and the California Department of Health Care Services (DHCS) were in the nature of statutory entitlements, not executory contracts, and as such did not need to be assumed to be transferred. The decision paved the way for the transfer of four of Verity’s hospitals to the purchaser free and clear of all liabilities, which included the hospital’s obligation to pay past-due fees related to their provider agreements.
 
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