Verity Health System of California amended liquidation plan confirmed

By Caroline Salls

Pittsburgh, Aug. 17 – Verity Health System of California, Inc.’s second amended plan of liquidation was confirmed on Friday by the U.S. Bankruptcy Court for the Central District of California.

Under the plan, a liquidating trustee will continue the wind-down and liquidation of the Verity debtors after the effective date and will oversee the operations of the post-effective-date debtors during a sale-leaseback period included in the company’s transition services agreement.

Administrative claims, secured mechanics lien claims, priority tax claims and priority non-tax claims will be paid in full in cash.

Secured PACE tax financing claims will be paid in accordance with an agreement with the California Statewide Communities Development Authority.

Holders of 2017 revenue notes claims will receive a share of $42 million in cash, plus interest.

Holders of 2015 secured revenue notes claims will receive a share of $160 million in cash, plus interest.

Holders of 2005 secured revenue bond claims will receive a share of $259.45 million in cash, plus interest.

Holders of secured MOB I financing claims will receive a share of $46.36 million in cash, plus interest.

Holders of secured MOB II claims will receive a share of $20.06 million in cash, plus interest.

Holders of general unsecured claims will receive second-priority trust beneficial interests.

Holders of 2016 data breach claims will receive access to creditor monitoring services paid by the Verity debtors for two years after the plan effective date.

Holders of interests and subordinated general unsecured claims will receive no distribution.

Verity is a Los Angeles-based nonprofit health care system. The company filed bankruptcy on Aug. 31, 2018 under Chapter 11 case number 18-20151.

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