Gulf Coast Health Care disclosure statement hearing moved to March 4

By Sarah Lizee

Olympia, Wash., Feb. 23 – Gulf Coast Health Care, LLC’s hearing on approval of the disclosure statement for its Chapter 11 plan of liquidation has been moved to March 4 from Feb. 28, according to notice filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company entered into a restructuring support agreement with its debtor-in-possession lender, OHI Asset Funding (DE), LLC (Omega), New Ark Capital, LLC, certain equity sponsors and service providers.

The RSA aimed to facilitate the continued operation of the skilled nursing or similar facilities through the debtors’ use of cash collateral, the $25 million DIP financing, and a proposed financing from New Ark.

It also contemplates the transition of the management and operations of the Omega facilities to one or more new operators designated by Omega and the transfer of the applicable Medicare provider agreements to a new operator.

The RSA also contemplates a Chapter 11 plan that will facilitate the wind down of the debtors’ business.

Under the plan, holders of DIP facility claims will receive the debtors’ cash and accounts receivable on the effective date, proceeds of the retained causes of action, and all other assets of the debtors after satisfaction of other claims.

Holders of administrative expense claims, priority tax claims and other priority claims will be paid in full.

Holders of New Ark claims will receive cash in the amount of their claims, less the amount of the New Ark funding.

Holders of other secured claims will receive payment in full or the collateral securing their claims.

Holders of Omega claims will receive a pro rata distribution of an unsecured claims cash amount. The pro rata distribution owed to the holders of subordinated seller note claims will be paid to the holders of the Omega unsecured claim until the Omega claim is paid in full. In the event that the class of general unsecured creditors votes to accept the plan, then the holders of the Omega unsecured claim will contribute their pro rata distribution of the unsecured claims cash amount to the holders of general unsecured claims, each of whom will receive their pro rata share of all such amounts.

Holders of the subordinated seller note claims will receive a pro rata share of the unsecured claims cash amount.

Holders of service provider claims will receive their pro rata share of the unsecured claims cash amount, provided that if general unsecured creditors vote to accept the plan, then holders of the service providers unsecured claim will contribute their pro rata share of the unsecured claims cash amount to the holders of general unsecured claims.

Holders of general unsecured claims will receive their pro rata share of the unsecured claims amount.

Intercompany claims and existing equity interests will be canceled.

Pensacola, Fla.-based Gulf Coast Health Care is a nursing home chain. The company filed Chapter 11 bankruptcy on Oct. 14 under case number 21-11336.

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