Saint Michael’s Medical Center granted approval of global settlement

By Caroline Salls

Pittsburgh, April 27 – Saint Michael’s Medical Center, Inc. received court approval of a global settlement reached with its official committee of unsecured creditors and Trinity Health Corp., according to an order filed April 26 with the U.S. Bankruptcy Court for the District of New Jersey.

Under the settlement, the medical center’s debtor-in-possession financing budget will be amended to include the costs of preparing and confirming a plan of liquidation and provide sufficient funding to wind down the Saint Michael’s estates, including the payment of allowed priority and administrative expense claims. The budget for these costs will be capped at $750,000.

In addition, the DIP loan will be increased to $15.75 million, and Trinity will waive all claims related to the DIP financing obligations.

Also under the settlement, Trinity will have a general unsecured claim against Saint Michael’s.

According to the motion, the committee’s objections to the DIP financing were resolved through mediation in October 2015.

Under the final DIP financing order, and as a result of the mediation, the parties agreed on the principal terms of a settlement of any potential claims and causes of action.

Saint Michael’s is a Newark, N.J., medical center. The company filed for bankruptcy on Aug. 10, 2015 under Chapter 11 case number is 15-24999.

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