Supported 100% recovery to the hospital's secured lender
Bellevue Hospital (Ohio)
Gibbins Advisors supported the sole bondholder before and throughout the Chapter 11 bankruptcy of a nonprofit rural community hospital. The case resulted in payment of substantially all bond and general unsecured creditor obligations — an outcome that greatly exceeded initial expectations.
TEAM Ronald Winters, Clare Moylan, Laura Burberry, Tyler Brasher
Situation Overview
Facing a liquidity crisis and imminent Chapter 11 filing, Bellevue Hospital (Ohio) sought a transaction and identified an insider as a potential acquiror. As originally proposed, the transaction value was far less than the Hospital’s secured debt.
Images are for illustrative purposes only.
Summary
Sector:
Rural, not-for-profit acute care hospital
Approx. Size:
50 beds, 360 employees
Our role:
Financial Advisor to the Bondholder
Key Results
Successful Member Substitution in bankruptcy auction process.
Bondholder (our client) went from facing losses to recovering 100% of its claim
34% increase in value achieved for the Hospital and its creditors.
With the sale, the Hospital is able to continue operating, providing access to care for the community, preserving jobs, and favorable treatment to the valued vendors.
Role
Gibbins Advisors was retained to advise the bondholder evaluate conditions and develop options. In connection with our work to improve recovery and limit risk, Gibbins actively supported financing negotiations and collaborated with the Hospital’s investment banker to achieve a highly favorable transaction outcome.
Approach
Gibbins quickly engaged with the Hospital and its advisors to assess the financial outlook the sale process. We successfully advocated for a robust marketing and transaction process and assisted the parties to identify and negotiate terms with a suitable investment banker. Additionally, we scrutinized the Hospital’s financing requirements during the case and successfully negotiated to hold financing needs to a minimum.
Impact at a Glance
The final transaction materially improved the outcome for the bondholder and general unsecured creditors… the new Member additionally made a significant capital commitment to the Hospital post-bankruptcy.
Under the approved Plan of Reorganization:
Bondholder (our client) received nearly 100% of its claim, (including interest, fees and expenses)
Unsecured creditors recovered $6.5M (estimated claims universe at the time of the auction)
Buyer contributed $16M for capital projects and other obligations
Hospital remained open, providing access to care in this rural market while preserving employment and continuing vendor relationships.
