Saint Michael’s Medical Center liquidation plan takes effect April 17

By Caroline Salls

Pittsburgh, April 17 – Saint Michael’s Medical Center, Inc.’s plan of liquidation took effect on Monday, according to a notice filed with the U.S. Bankruptcy Court for the District of New Jersey.

The plan was confirmed on Jan. 12.

Saint Michael’s said the plan incorporates two previously approved settlements.

Under a Trinity settlement, liquidity was provided to fund the Chapter 11 cases and excess funds to fund the proposed plan. Specifically, the settlement includes a $15 million debtor-in-possession facility, repayment of which was waived, a preferred distribution to general unsecured creditors and funding of $750,000 for the costs of preparing and confirming a plan of liquidation.

Under a Bank of New York Mellon settlement, the company said it resolved the single largest claim, which exceeded $233 million, for $55.75 million, making possible the projected distribution in the St. Michael’s cases.

The debtors will terminate, and all assets not sold or otherwise distributed will be transferred to a liquidation trust.

In addition, an oversight committee will be formed to advise and assist the trust.

Holders of priority claims will be paid in full in cash.

Non-lender secured claims will either be reinstated, the lien will be retained and the holder will receive deferred cash payments, the holder will be paid in full in cash or the collateral will be surrendered to the holder.

Holders of general unsecured claims will receive a share of cash.

Holders of equity interests will receive a share of any assets remaining for distribution after all other plan distributions are made.

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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