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Financial Advisor to the UCC of Healthcare Provider

By: Brian S. Buebel, CIRA

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The Opportunity

Huron Served as the Financial Advisor to the Unsecured Creditors’ Committee of the primary healthcare provider for Northern Berkshire County in Massachusetts. It is a private, not-for-profit organization providing health services to the northwest Massachusetts and southwest Vermont regions.

The healthcare provider had been under increasing financial distress for many years. The primary factors causing this distress were an over-leveraged balance sheet, losses associated with one of their business units as well as the sale of that business at a depressed price, and declining revenue due to national and local economic factors. Those financial pressures resulted in operational losses which significantly eroded available working capital. As a result, the organization sought a restructuring through Chapter 11.

The Solution

In that role, we:

  • Reviewed and analyzed the terms of the Disclosure Statement and Plan of Reorganization.
  • Performed a detailed business plan review and analysis, including a sensitivity analysis of the projections.
  • Reviewed DIP Budget variance reports and assessed the liquidity situation with weekly reporting to the UCC.
  • Analyzed various scenarios to maximize the recovery value to the unsecured creditors.
  • Assessed the Company’s strategy and ability to execute in order to sustain a strong healthcare organization.
  • Met with the Board of Trustees to discuss concerns with the Company’s business plan.

The Outcome

As a result of our work, the unsecured creditors realized a 5% recovery, despite initial expectations that no recovery was to be achieved; the Committee was successful in pushing its strategic considerations to help ensure an ongoing business concern; and the company successfully emerged from Bankruptcy in June 2012.

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