Victory Memorial granted court approval for plan of reorganization

By Jennifer Lanning Drey

Portland, Ore., Feb. 23 - Victory Memorial Hospital obtained court approval for its plan of reorganization from the U.S. Bankruptcy Court for the Eastern District of New York, according to a Friday filing.

As previously reported, the company sold its primary assets to Sunset LG Realty LLC and received court approval to obtain $2 million of unsecured debtor-in-possession financing from Borgen Funding, LLC to take it through the closing of the sale.

Creditor treatment under Victory Memorial's plan of reorganization will include:

• Holders of secured tax claims will receive full payment in cash;

• Holders of $19.78 million in Dasny bond claims will be paid in full by the hospital or the liquidating trust;

• Holders of $14.11 million in secured lender claims will be paid in full in cash either by the hospital or the liquidating trust;

• Holders of $5.8 million in other secured claims will either receive the property securing the claim or the payment of any amounts owed by an assignee under Victory's primary asset sale;

• Holders of $200,000 in unsecured priority claims will receive full payment in cash;

• Holders of $49.7 million in unsecured non-priority claims will receive a share of liquidating trust beneficial interests; and

• Holders of subordinated claims will receive no distribution under the plan.

Victory Memorial, a Brooklyn, N.Y.-based hospital, filed for bankruptcy on Nov. 15, 2006. Its Chapter 11 case number is 06-44387.

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