Chapter 11 plan of Saint Vincent Catholic Medical Centers of New York confirmed
Grant Thornton LLP and Kramer Levin Naftalis & Frankel LLP conclude
significant healthcare industry bankruptcy
NEW YORK, June 25, 2012 – Wrapping up one of the most complicated healthcare bankruptcy cases in the United States, the U.S. Bankruptcy Court for the Southern District of New York confirmed the Chapter 11 plan of Saint Vincent Catholic Medical Centers of New York and various of its affiliates (Saint Vincent’s) today.
Grant Thornton LLP served as interim management and Kramer Levin Naftalis & Frankel LLP served as debtor’s counsel for what has been recognized as one of the largest and most complex bankruptcy proceedings for the historic New York City hospital system founded in 1849. In a case that, at times, was potentially unable to pay its post-bankruptcy expenses, Saint Vincent’s Chapter 11 plan provides for a 100 percent recovery for administrative, priority creditors and secured lenders, and a substantial recovery by the employees and pensioners. Importantly, Saint Vincent’s successfully consummated several going-concern sales of its healthcare services, preserving critical patient care needs in the communities served by the hospital system.
Grant Thornton Practice Leader and National Managing Partner Mark E. Toney and Grant Thornton Partner Steven Korf were appointed as chief restructuring officer and chief financial officer, respectively. As crisis and interim management of Saint Vincent’s, Grant Thornton and Saint Vincent’s lead counsel, Kenneth H. Eckstein and Adam C. Rogoff of Kramer Levin, worked together on numerous initiatives to first attempt to preserve the healthcare system, including obtaining interim funding and identifying a potential new sponsor. When no parties stepped forward to provide a full service hospital, the team moved to secure the continuity of care and protection of patients in an orderly closure of the Manhattan Hospital located in the Lower West Village of New York City and continued operating numerous other services, including a behavioral health hospital and three nursing homes, until transactions with new sponsors could be identified and consummated.
“Managing Saint Vincent Catholic Medical Centers’ second bankruptcy required balancing the complexity of the bankruptcy, the need for compassion for the patients, community and staff, and the cooperation of the constituent groups involved. We had to balance the interests of these wide ranging groups in Saint Vincent’s court-supervised restructuring process to generate the positive outcome that has resulted,” said Toney.
“The complexity of this bankruptcy was magnified by the recognition of the hospital’s charitable mission and dedication to meeting the needs of patients. Reaching the milestone of plan confirmation, which balanced this mission with recoveries for creditors, is something of which we are very proud,” said Kenneth Eckstein, lead counsel for the debtor.
During the case, the Saint Vincent’s management and legal team negotiated a $260 million sale of the Manhattan Hospital campus with the Rudin Family, which includes a requirement for opening a new comprehensive care center, including a precedent-setting free-standing emergency department, by North Shore-LIJ hospital. This transaction won M&A Advisor’s 6th Annual Turnaround Awards for Turnaround Community Impact Deal of the Year and Healthcare/Life Sciences Deal of the Year.
Key members of the team involved with the bankruptcy were:
Counsel to the Debtors - Kramer Levin Naftalis & Frankel LLP
- Kenneth H. Eckstein, Esq.
- Adam C. Rogoff, Esq.
- P. Bradley O’Neill, Esq.
- Gregory G. Plotko, Esq.
- Anupama Yerramalli, Esq.
Interim Management - Grant Thornton LLP
- Mark E. Toney – Chief Restructuring Officer
- Steven Korf – Chief Financial Officer
- Scott Davis – Operations and asset dispositions
- James Porter – Treasury and cash management
- Jay Burkett – Revenue cycle and Centralized Business Office operations
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About Grant Thornton LLP’s Corporate Advisory & Restructuring Services
Grant Thornton LLP’s Corporate Advisory & Restructuring Services (CARS) group includes more than 60 professionals in six offices in the U.S. and over 1,000 restructuring professionals around the world. The group’s professionals possess extensive experience with both bankruptcy and out-of-court restructuring, spanning many industries, including financial services, energy, automotive, gaming and hospitality, healthcare, manufacturing, real estate and retail. Our clients include debtors, lenders, individual creditors and creditor committees, in addition to officers and directors and the boards and committees involved with corporate governance.
About Grant Thornton LLP
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About Kramer Levin Naftalis & Frankel LLP
Kramer Levin Naftalis & Frankel LLP is a premier, full-service law firm with offices in New York, Silicon Valley and Paris. Firm lawyers are leading practitioners in their respective fields. The firm represents Global 1000 and emerging growth companies, institutions and individuals, across a broad range of industries. For more information, please visit www.kramerlevin.com.
