Gulf Coast Health Care judge receives letter about recent developments

Chicago, May 4 – A letter filed with the U.S. Bankruptcy Court for the District of Delaware regarding a potential upcoming ruling on confirmation of Gulf Coast Health Care, LLC’s first amended joint plan of liquidation cited recent developments that could pertain to the case.

The letter said that a report that Omega Healthcare Investors, Inc. sold the majority of Gulf Coast Health Care facilities for a profit of approximately $113.5 million was suspicious given the backdrop of a current bear market for nursing homes.

Additionally, on Tuesday night Health Care Navigator, LLC objected to Medline Industries LP’s motion to reopen the case to seek to unseal a complaint filed against certain of the Schwartzberg entities.

The letter says that many of the parties in the case are also involved in other bankruptcy cases in other forums.

Medline, a member of the committee in two of the cases, has alleged that the Schwartzberg family has engaged in a pattern of fraud across multiple nursing homes to pilfer their assets, then forced them into bankruptcy to have unsecured creditors absorb the losses.

Medline believes that unsealing the complaint will help them prove their argument.

The other court has set a hearing to decide this motion for May 10, at which point the sealed complaint may become available to all parties in the Gulf Coast bankruptcy case and the court.

The letter was signed R. Stephen McNeill.

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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