Advised the UCC in one of Puerto Rico's largest commercial bankruptcies
Grupo HIMA San Pablo, Inc.
Despite overwhelming secured debt and a dire outlook for unsecured creditors, Gibbins Advisors, as Financial Advisor to the Unsecured Creditors’ Committee, delivered meaningful recoveries to its client ensuring administrative expenses were paid in full and a Liquidating Trust was established.
TEAM Ronald Winters, Tyler Brasher
Situation Overview
Grupo HIMA San Pablo, Puerto Rico’s largest private hospital system, entered Chapter 11 with ~$248m in secured debt and over $200m in unsecured claims. Given the debt load, unsecured creditors faced bleak prospects for recovery. Recoveries were only possible through successful negotiations with secured lenders and a global settlement.
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Summary
Sector:
For profit acute care hospital system
Approx. Size:
$400m in liabilities
Our role:
Financial Advisor to the Unsecured Creditors Committee
Key Results
Preserved value in a complex Puerto Rico hospital bankruptcy
Secured full payment of administrative claims
Established a Liquidating Trust for oversight and distributions to unsecured creditors
Delivered meaningful recoveries to unsecured creditors despite overwhelming secured debt
Role
Gibbins Advisors served as the Unsecured Creditors’ Committee’s Financial Advisor, providing strategic decision support, analyzing the debtor’s finances and sale process, and ensuring unsecured creditors’ interests were protected in negotiations with the debtor and secured lenders.
Approach
Gibbins Advisors worked closely with Committee Counsel to protect creditor interests in a debt-laden, distressed hospital bankruptcy. We conducted detailed financial and sale-process analyses, monitored the debtor’s operations, and negotiated vigorously with the Debtor and Secured Lender to preserve value for unsecured creditors.
Key Accomplishments
Negotiated plan terms ensured all administrative and professional claims were paid in full, avoiding administrative insolvency and protecting the estate’s ability to confirm a plan.
General unsecured creditors achieved a pro rata share of Liquidating Trust Distributable Cash from asset sales and settlements, a far better outcome than liquidation under Chapter 7.
With $248m of secured debt and over $200m in unsecured obligations, the UCC, through its advisors, negotiated a Global Term Sheet that balanced secured lender rights while preserving value for lower-priority creditors.
Structured post-confirmation governance through a Liquidating Trust and Oversight Committee, giving unsecured creditors ongoing oversight of distributions and litigation recoveries.
The Debtors and the UCC jointly recommended the plan as it delivered significantly higher recoveries than a conversion to Chapter 7.
