Secured a sustainable future for a critical regional hospital
Central Iowa Healthcare
When the hospital faced imminent closure, Ronald Winters stepped in as Chief Restructuring Officer* and led a high-stakes Chapter 11 bankruptcy. The hospital was successfully sold to a regional health system within six months - continuing patient care, preserving jobs and paying off all secured debt.
TEAM Ronald Winters
Situation Overview
Central Iowa Healthcare (CIH), a 49-bed acute care hospital with associated clinics, was the sixth-largest employer in Marshalltown, Iowa. The organization faced mounting financial pressures from a failed EMR implementation, declining patient volumes, reimbursement pressure, and inability to access needed capital for modernization. By late 2016, CIH had sustained losses of nearly $20 million over two years, resulting in severe liquidity strain and inability to meet debt obligations.
Images are for illustrative purposes only.
Summary
Sector:
Rural, not-for-profit acute care hospital
Approx. Size:
49 beds and four primary care clinics
Our role:
Chief Restructuring Officer*
Chief Wind-down Officer*
Key Results
Secured a major regional health system as the buyer
Patient care remained uninterrupted
Complex claims were resolved
All secured creditors and allowed priority claims were fully repaid
Unsecured creditors received a meaningful distribution under the Plan of Liquidation and jobs in the community were preserved
Role
Gibbins Advisors Principal Ronald Winters was appointed Chief Restructuring Officer* to lead the hospital through a Chapter 11 sale and keep the hospital open. Subsequently, Winters was retained as Chief Wind-down Officer* to effectuate the Chapter 11 Plan of Liquidation (“POL”)
*Role performed by Winters while working for a previous employer
Approach
Winters and his team immediately took steps to stabilize operations. Strict cash controls and vendor management efforts were put into place, and resources were focused on patient care and compliance. Debtor-in-Possession financing was quickly obtained to fund payroll and vendor obligations. An accelerated sale process was launched, and a stalking horse bidder quickly emerged. Upon sale of the hospital, a Liquidation Trust was established to administer unsecured creditor distributions.
Key Accomplishments
•Sale transaction closed in just 130 days
•Patient care was preserved: No disruption occurred in clinical services and the Buyer committed to continuing operations and investing in the community
•The vast majority of CIH’s 500 employees were transitioned to the Buyer and jobs were preserved.
•Secured and priority claims were paid in full, and unsecured creditors were paid through the Trust.
