Quorum Health equity holder seeks to adjourn confirmation hearing

By Caroline Salls

Pittsburgh, April 29 – Quorum Health Corp. equity holder Mudrick Capital Management, LP asked the U.S. Bankruptcy Court for the District of Delaware to adjourn the hearing on confirmation of the company’s plan of reorganization and approval of the related disclosure statement, according to a motion filed Wednesday.

The plan hearing is scheduled for May 22.

Mudrick said the court said during the hearing on approval of Quorum’s first-day motions that if “there is a serious objection that is filed or an appointment of a[n equity] committee, then the timeline will most likely be reconsidered.”

Mudrick said it has filed an objection to the plan and disclosure statement that identifies serious impediments to confirmation of the plan.

According to the motion, Quorum has already received millions of dollars from a federal government grant and will likely receive hundreds of millions of dollars in cash.

“These readily available liquid funds seriously undermine the valuation that is the foundation of the plan and firmly establish the debtors’ solvency,” the motion said.

“While the current facts clearly call for the debtors to reassess the plan, Mudrick has serious concerns whether the debtors will act in good faith by slowing down their rush to confirmation to afford themselves additional time to reassess their current course.”

As a result, Mudrick said it is asking the court to reconsider the current timeline and adjourn the hearing to allow the company to ascertain and disclose the full extent of the benefits they will receive under the CARES Act and give equity holders enough time to conduct reasonable discovery and sufficiently evaluate the plan and the underlying valuation upon which it is based.

Quorum Health is a Brentwood, Tenn.-based operator and manager of general acute care hospitals and outpatient services. The company filed bankruptcy on April 7 under Chapter 11 case number 20-10766.

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