Pipeline Health disclosure statement OK’d; plan hearing Dec. 19

By Sarah Lizee

Olympia, Wash., Nov. 17 – Pipeline Health System, LLC received approval of the disclosure statement for its recently amended Chapter 11 plan, according to an order filed Wednesday with the U.S. Bankruptcy Court for the Southern District of Texas.

The plan confirmation hearing is scheduled for Dec. 19.

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

Pipeline Health said it will provide notice if 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 was set for Nov. 7, other indications of interest were 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.

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.

Votes on the plan are 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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