Saint Vincents Catholic Medical Centers: Reorganization plan, labor settlement agreement approved

By Lisa Kerner

Charlotte, N.C., June 25 - Saint Vincents Catholic Medical Centers of New York's amended joint Chapter 11 plan of reorganization was confirmed by the U.S. Bankruptcy Court for the Southern District of New York on June 25, according to an attorney familiar with the case.

As previously reported, under the plan, treatment of creditors would include the following:

• Holders of priority non-tax claims will be paid in full in cash;

• Holders of other secured claims will receive either the collateral securing their claims, the value of the collateral or the net proceeds from the sale of the collateral;

• Holders of Sun Life secured claims and MedMal Trusts secured claims will receive distributions equal to the amount of specified property sale proceeds;

• Holders of general unsecured claims will receive a share of proceeds in an unsecured claims fund; and

• Holders of multi-employer pension fund subordinated unsecured claims will receive a share of the unsecured claims fund proceeds after all general unsecured claims are paid in full.

Also on June 25, the court approved a settlement agreement with the New York State Department of Labor relating to the resolution of alleged priority and secured claims for unemployment insurance contributions.

As previously reported, the DOL has asserted priority claims totaling about $9.3 million against various debtors for the reimbursement of unemployment benefits paid to the debtors' former employees by the DOL's State Reimbursement Fund.

The settlement agreement provides for a $3 million cash payment, an administrative expense claim of $128,400.32 and an allowed general unsecured claim of about $6.3 million.

Saint Vincents, a New York-based health-care system, filed for bankruptcy on April 14, 2010. Its Chapter 11 case number is 10-11963.

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