PCHC Winning Bid Announced
From WRIL -
WRIL has just acquired a copy of an order confirming the winning bid component of the chapter 7 trustee’s sale of the bankruptcy estate property involving Pineville Community Hospital Association. This order came down from the US Bankruptcy Court for the Eastern District of Kentucky today in London signed into effect by Gregory R. Schaaf Bankruptcy Judge.
In essence it reads that there was an order authorizing the sale and bidding procedures for the property and assets of the hospital on June 20, 2019.
It goes on to state that the auctioneer – Tranzon Asset Advisors - would sell the sale assets pursuant to a two round auction, the first which would run until Monday, July 15, 2019 and the second round of which would run on Thursday July 18, 2019 from 10:00AM until 11:00AM if the on-line second round method were used, or until the Trustee completed her one-on-one negotiations with the lead bidders.
The two bidding rounds were extended pursuant to the amended bid order until Tuesday July 30, 2019 and Thursday August 1, 2019, respectively. The Trustee elected to proceed with one-on-one discussions given the nature of the three bidders on Lot 1 for all assets and was the preference of the Trustee to sell all assets as opposed to individual bidders.
The Trustee, in her business judgment, requested that final bids and conditions be submitted to her by 4:00 p.m. on August 1, 2019. A hearing on the Motion to Confirm was held on Monday, August 5, 2019 in Lexington.
The winning bid goes to Cura Healthcare, Inc. and its principal “Louis M. Volpini.” for $7,000,000.00, plus 5% buyer’s premium of $350,000.00, for a total sale price of $7,350,000.00.
Of the $7,000,000 winning bid, half ($3,500,000) will be paid to the bankruptcy estate, and used to pay $300,000 to the City of Pineville pursuant to the surcharge provided for in the July 21, 2019 order authorizing increased surcharge of $500,000 paid to the trustee. This includes “net cash proceeds” of the personal property with Pineville Medical Center, LLC (“PMC”), and the balance held and paid to secured creditors in the order of priority of their secured claims.
The other half ($3,500,000) will not be property of the Bankruptcy Estate, but will be deposited into an escrow account solely designated for operating costs of the purchased hospital entity. (This portion of the bid is to show the employees and the community that this Successful Bidder is committing its resources to the success of the hospital, rural healthcare clinic, and all services that the hospital has been providing or could provide).
As of the hearing date and time on the motion, the winning bidder Cura Healthcare Inc.,
had failed to make its 20% cash deposit in accordance with the sale order, in the amount of $1,400,000.00, but they have until August 16, 2019 to make good on the final settlement and payment of the total sales price, with credit for non-refundable deposits.