LRGHealthcare: Trustee objects to terms of cash collateral motion

By Sarah Lizee

Olympia, Wash., Nov. 10 – LRGHealthcare’s motion to use cash collateral drew an objection Tuesday from region 1 U.S. trustee William K. Harrington, according to a filing in the U.S. Bankruptcy Court for the District of New Hampshire.

Harrington said in his objection that the terms of the cash collateral use motion would effectively “disarm the debtor of all weapons usable against [the lender] for the bankruptcy estate’s benefit and give the lender iron-clad defenses to all claims that might be asserted on the estate’s behalf.”

The U.S. trustee said the debtor should not request approval of provisions requiring the release of causes of action and defenses against the lender or prohibiting the use of the funds to challenge the lender or its claims.

“The lender should not be permitted to tie the court’s and the debtor’s hands, impairing their ability to protect not only creditors but members of the public in the event a surcharge under section 506(c) becomes necessary,” Harrington added.

LRGHealthcare is a Laconia, N.H.-based not-for-profit health care charitable trust operating Lakes Region General Hospital, Franklin Regional Hospital and several other affiliated medical practices and service programs. The company filed Chapter 11 bankruptcy on Oct. 19 under case number 20-10892.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.