Impact of the New Bankruptcy Law on Health Care Bankruptcies
by William W. Kannel and Sara R. Bollerup; Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC; Boston
Much of the commentary on the pending bankruptcy legislation has focused on consumer bankruptcies. However, several provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, S. 256 (the “Act”), are specifically targeted to health care bankruptcies. If it becomes law, as is widely expected, the legislation will provide an exception to the automatic stay for government action to suspend a debtor from participation in the Medicare program or any other federal health care program. Additionally, the legislation would place new burdens on health care debtors by providing procedures for disposing of patient records, closing of a facility and transferring patients. The legislation also provides for the appointment of a patient advocate ombudsman. However, the amendments also have the salutary effect of recognizing patients as an important constituency in any health care bankruptcy.
Agenda for the 2005 Annual Spring Meeting
Treatment of Malpractice Claims in Bankruptcy Court: Putting the Lid on Pandora’s Box
The ABI Health Care Committee meeting on April 30, 2005, at the Annual Spring Meeting, will focus on the issue of how medical malpractice claims may and may not be treated in bankruptcy. Leading the discussion will be a panel that will include the Hon. S. Martin Teel Jr., U.S. Bankruptcy Judge for the District of Columbia; David E. Rice, a partner in the bankruptcy group of Venable LLP in Baltimore and James Page, Senior Vice President of Caronia Corporation in Long Island, N.Y. The panel moderator will be Sam J. Alberts, a partner in the financial restructuring and insolvency group of White & Case LLP.
Issues to be discussed will include:
- estimation of medical malpractice claims for plan treatment, voting purposes and distribution;
- the extent to which medical malpractice claims may or may not be objected to in bankruptcy;
- treatment and use of medical malpractice insurance proceeds;
- alternative dispute resolution procedures with respect to medical malpractice claims;
- the transfer of medical malpractice claims to trusts and/or purchasers;
- preconfirmation issues, including relief from stay;
- the applicability of channeling injunctions and third-party releases.