Former Sumner Regional: Court OK's disclosure statement; plan confirmation hearing June 23

By Lisa Kerner

Charlotte, N.C., April 26 - SRHS Bankruptcy, Inc., formerly Sumner Regional Health Systems, Inc., had its disclosure statement approved by the U.S. Bankruptcy Court for the Middle District of Tennessee on April 26, according to an attorney familiar with the case.

SRHS filed its plan of liquidation and related disclosure statement on March 1.

A plan confirmation hearing is set for June 23, the attorney said.

As previously reported, under the plan, the cash generated from the sale of substantially all of the company's assets to LifePoint Acquisition Corp. will be distributed to creditors.

In addition, the creditors will also receive proceeds from the collection of accounts receivable and the sale of SRHS' remaining assets.

Treatment of creditors

Creditors will be treated as follows:

• Holders of administrative claims, priority tax claims and other priority claims will be paid in full in cash;

• Holders of the bond trustee secured claim, having already received $120.96 million at the sale closing, will also receive a bond holdback distribution, downstream LAC proceeds, proceeds from the sale of the remaining assets subject to bond trustee liens, avoidance action proceeds and distributions of available cash;

• Holders of other secured claims will either be paid in full in cash or receive the collateral securing their claims;

• Holders of unsecured claims will receive distributions of available cash until they recover 100% on their claims without interest; and

• Holders of county residual claims will receive a share of available cash after all other claims and plan administration costs and expenses have been paid in full.

Sumner Regional, a Tennessee health care provider, filed for bankruptcy on April 30, 2010. Its Chapter 11 case number is 10-04766.

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