LRGHealthcare gets court approval to access $6 million DIP facility

By Sarah Lizee

Olympia, Wash., April 6 – LRGHealthcare secured court approval to access a $6 million debtor-in-possession facility with Concord Hospital, Inc. as lender, according to an order filed Tuesday with the U.S. Bankruptcy Court for the District of New Hampshire.

As previously reported, LRGHealthcare received court approval to sell its assets to Concord for a purchase price of $30 million.

The company said that while it had hoped to complete the sale on or before April 1, due to the New Hampshire state approval process, the closing will not occur until later.

Consistent with the debtor’s cash collateral budgets, with continued operations the debtor said it would effectively be left with only $500,000 in available cash on April 2, and effectively out of cash by April 17.

The company had previously obtained court approval of an amendment to the purchase agreement with Concord. The amendment, combined with the DIP financing, is designed to bridge any liquidity shortfalls before the sale can close.

The facility will terminate on the earliest of May 2, the termination of the asset purchase agreement, the acceleration of the loan following an event of default and the closing of the sale.

Interest will be 5% until May 1, and 7.5% after that. The default rate is 10%.

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, 2020 under case number 20-10892.

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