Quorum Health Corporation and certain of its direct and indirect subsidiaries field a Disclosure Statement in support of their Joint Prepackaged Chapter 11 Plan of Reorganization.
The restructuring transactions under the Plan provide for a comprehensive restructuring of claims against and interests in the Debtors, de-leverage the Company’s capital structure, preserve the going-concern value of the Debtors’ businesses, maximize recoveries available to all constituents, provide for an equitable distribution to the Debtors’ stakeholders, and protect the jobs of the Debtors’ employees.
More specifically, the restructuring transactions provide, among other things, that:
* All Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Other Secured Claims, and Allowed Other Priority Claims shall be paid in full in cash or receive such other treatment that renders such Claims Unimpaired.
* Each Allowed DIP Claim shall be paid in full in cash.
* The Holders of all Allowed ABL Claims shall receive indefeasible payment in full in Cash of such Allowed ABL Claims.
* Each Holder of an Allowed First Lien Loan Claim shall receive such Holder’s pro rata share of (a) the First Lien Loan Claims Paydown Amount; and (b) the Exit Facility. First lien lenders owed $785,336,316 will recover 100%.
* Each Holder of an Allowed Senior Notes Claim shall receive such Holder’s pro rata share of (a) 100% of the New Common Stock, subject to dilution by New Common Stock issued pursuant to (i) the New Common Equity Raise; (ii) the Equity Investment Commitment Premium; and (iii) the MIP; and (b) the QHC Litigation Trust Interests. Holders of Class 5 Senior Notes Claims totaling $400,000,000 will recover 9.5%.
* All outstanding and undisputed General Unsecured Claims will be Unimpaired by the restructuring unless otherwise agreed to by the Holder of such General Unsecured Claim. Class 6 General Unsecured Claims totaling $260,000,000 will recover 100%.
A full-text copy of the Disclosure Statement dated April 8, 2020, is available at https://tinyurl.com/wooe8ox from PacerMonitor.com at no charge.
Counsel to the Debtors:
Felicia Gerber Perlman
Bradley Thomas Giordano
Megan M. Preusker
MCDERMOTT WILL & EMERY LLP
444 West Lake Street
Chicago, Illinois 60606-0029
Telephone: (312) 372-2000
Facsimile: (312) 984-7700
– and –
David R. Hurst
MCDERMOTT WILL & EMERY LLP
The Nemours Building
1007 North Orange Street, 4th Floor
Wilmington, Delaware 19801
Telephone: (302) 485-3900
Facsimile: (302) 351-8711
About Quorum Health Corporation
Headquartered in Brentwood, Tennessee, Quorum Health (NYSE: QHC) is an operator of general acute care hospitals and outpatient services in the United States. Through its subsidiaries, the Company owns, leases or operates a diversified portfolio of 24 affiliated hospitals in rural and mid-sized markets located across 14 states with an aggregate of 1,995 licensed beds. The Company also operates Quorum Health Resources, LLC, a leading hospital management advisory and consulting services business.
Quorum Health incurred net losses attributable to the Company of $200.25 million in 2018, $114.2 million in 2017, and $347.7 million in 2016.
As of Sept. 30, 2019, Quorum Health had $1.52 billion in total assets, $1.72 billion in total liabilities, $2.27 million in redeemable non-controlling interest, and a total deficit of $203.36 million.
On April 7, 2020, Quorum Health Corporation and 134 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10766) to seek confirmation of a pre-packaged plan.
McDermott Will & Emery LLP and Wachtell, Lipton, Rosen & Katz are serving as the Company’s legal counsel, MTS Health Partners, L.P. is serving as its financial advisor and Alvarez & Marsal North America, LLC. is serving as restructuring advisor. Epiq Corporate Restructuring, LLC, the claims agent, is maintaining the website issuing developments.