Christ Hospital, committee file joint plan based on PBGC settlement

By Caroline Salls

Pittsburgh, March 18 - Christ Hospital and its official committee of unsecured creditors filed a joint plan of liquidation and related disclosure statement Friday with the U.S. Bankruptcy Court for the District of New Jersey.

The hospital said the sale of its assets closed on July 13, 2012.

The plan is based on a settlement with the Pension Benefit Guaranty Corp.

PBGC settlement

Christ Hospital said PBGC filed more than $160 million in claims against its estate in connection with the hospital's failure to make contributions to its pension plan and the liabilities assumed by PBGC as a result of the termination of the pension plan.

Because a $33 million PBGC secured claim far exceeded the remainder of the sale proceeds, the hospital said the agency's consent was required to allow the payment of at least administrative and some priority claims and to allow Christ Hospital to stay in Chapter 11 and have on opportunity to propose a plan of liquidation.

PBGC gave that consent and received a payment of $3.5 million at the time of the sale closing in partial satisfaction of its claims.

Under the settlement, PBGC agreed to accept $4 million in addition to the previous payment in full satisfaction of its claims.

A liquidating trust will be established under the proposed plan. A trustee will liquidate the hospital's assets and distribute the proceeds to creditors.

Creditor treatment

Treatment of creditors will include the following:

• Administrative expense claims, priority tax claims and priority non-tax claims will be paid in full in cash;

• The PBGC will receive its subsequent settlement payment;

• Holders of secured claims of other lienholders will either have their claims reinstated, will retain a lien and receive deferred cash payments, will receive the collateral securing the claim or will be paid in full in cash; and

• Holders of general unsecured claims will receive a share of money to be distributed from a general unsecured creditor account.

The disclosure statement hearing is scheduled for April 22.

Jersey City-based Christ Hospital filed for bankruptcy on Feb. 6, 2012. Its Chapter 11 case number is 12-12906.

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