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Saturday, May 24, 2014
Specialty Hospital Files for Bankruptcy With Bid From Silver Point
Per the Wall Street Journal:
May 22, 2014 2:01 p.m. ET
Beleaguered Specialty Hospital of America LLC filed for bankruptcy protection Wednesday with a plan to sell its Washington, D.C., health care facilities to hedge fund Silver Point Capital.
Silver Point's proposed purchase of Boston-based Specialty's long-term acute care hospitals via an auction process supervised by the U.S. Bankruptcy Court in Washington marks the culmination of weeks of uncertainty about the fate of the company's hospitals and nursing homes.
"Our new financial agreements are a lifeline for saving a vital regional health care resource and averting the immediate and ongoing health care crisis that would ensue in the greater Washington, D.C., metropolitan area if SHA's facilities were forced to close," Specialty Health President Frank Wilich said in a statement.
The deal will enable Specialty's two long-term acute-care hospitals in Washington's Capitol Hill and Southwest sections, as well as its two nursing homes, to continue to serve more than 300 patients.
Silver Point, a Connecticut hedge fund that specializes in investing in the debt of troubled companies, is providing $15 million in bankruptcy funding to keep the hospitals' doors open and to pay Specialty's vendors, suppliers and 750 employees.
Specialty's fate has been in limbo for some time. Last month a group of businesses owed more than $2.5 million by Specialty moved to push its Washington hospital into bankruptcy in Delaware. That is just a fraction of the more than $50 million in debt Specialty listed in court papers in this week's bankruptcy filing. . . .