Pipeline Health amends Chapter 11 plan, disclosure statement

Chicago, Nov. 7 – Pipeline Health System, LLC filed an amended Chapter 11 plan and an amended disclosure statement, according to filings with the U.S. Bankruptcy Court for the Southern District of Texas.

The disclosure statement hearing is currently scheduled for Nov. 16, and the confirmation hearing was moved to Dec. 19.

In the Chapter 11 plan, certain terms were tightened up according to a redline version.

The company will be pursuing either an equitization restructuring or an asset sale restructuring.

The timeline is now detailed that the company would provide notice that it has elected an asset sale restructuring before the confirmation hearing but only after the conclusion of a marketing and auction process.

Illinois-only bids for the assets sales would be due by Nov. 7, other indications of interest would be due by Nov. 16 and other bids would need to be submitted by Nov. 29. An auction would be held on Dec. 1, if required. The sale hearing would be held on Dec. 9.

The changes in the plan also included language around the ABL agent and ABL lenders.

According to the amended disclosure statement, the debtors plan to again ask for debtor-in-possession financing ahead of the hearing on approval of the disclosure statement.

Plan

As previously reported, under the pre-packaged Chapter 11 plan, term loan lenders will either receive reorganized equity or the debtors’ assets through a credit bid.

Holders of other secured claims will receive payment in full in cash, reinstatement of their claims, or other treatment leaving the claims unimpaired.

Holders of other priority claims will receive payment in full in cash or other treatment leaving the claims unimpaired.

If an equitization restructuring occurs, holders of asset-based lending facility claims will receive their pro rata share of an exit facility. If an asset sale restructuring occurs, they’ll receive either a pro rata share of the exit facility or a pro rata share of the debtor’s remaining cash after payment in full of senior claims. There will be at least $20,602,335 in aggregate, according to the amended document.

Term loan claims will be allowed in an amount of no less than $257,655,259.08. The class is impaired. If the equitization restructuring occurs, lenders will receive a pro rata share of the equity pool. If there is an asset sale, term loan lenders would receive a pro rata share of the credit bid distribution and a pro rata share of the debtors’ remaining cash.

If the equitization restructuring occurs, general unsecured claims will be discharged and released with no distribution. If an asset sale restructuring occurs and there are any excess sale proceeds, holders will receive a pro rata share of those proceeds.

Holders of intercompany claims will receive no distribution.

Intercompany interests will be reinstated, distributed, contributed, set off, settled, canceled and released, or otherwise addressed.

All existing parent interests will be canceled without any distribution.

Holders of section 510(b) claims will receive no distributions.

Under the amended disclosure statement, votes on the plan would be due by 5 p.m. ET on Dec. 9.

Pipeline Health System is an El Segundo, Calif.-based community-focused health care network. It filed bankruptcy on Oct. 2 under Chapter 11 case number 22-90291.

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