Verity exclusivity extension, settlement with contract party approved

By Sarah Lizee

Olympia, Wash., May 21 – Verity Health System of California, Inc. obtained court approval of a settlement reached with Premier, Inc., as well as an extension of its exclusive periods for filing and soliciting votes on a Chapter 11 plan, according to separate orders filed Tuesday in the U.S. Bankruptcy Court for the Central District of California.

As previously reported, Verity said the settlement deals with the assumption of some of Premier’s pre-bankruptcy executory contracts and the cure of Premier’s pre-bankruptcy claims related to the Verity debtors’ and Premier’s ongoing business relationship.

The company said the Verity debtors and Premier are parties to seven different contracts.

Verity said the settlement allows it to recover value from the current and future disposition of some limited partnership interests that may total $7.4 million before payment of cure costs.

According to the motion, the settlement nets the payments to be made to Premier as cure for the assumption of certain agreements against the value to be received by the Verity debtors for the monetization of Verity Health System’s limited partner unit interests in Premier Healthcare Alliance, LP through their exchange or sale.

The agreement allows the parties to end their relationship, the motion said.

The court granted approval for Verity to extend its exclusive plan-filing period to July 27 from April 28 and the solicitation period to Sept. 25 from Aug. 26.

The company said in the motion that it expects to file a plan after the sale of its St. Francis Medical Center, St. Vincent Medical Center, St. Vincent Dialysis Center and Seton Medical Center to Strategic Global Management, Inc. closes.

“However, because this sale involves a buyer who is subject to review of the attorney general under state law, this proposed sale cannot close before April 28, 2019, when the exclusivity period expires,” the motion said.

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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