When a healthcare provider experiences financial or operational challenges our National Healthcare Restructuring team has the knowledge and experience to provide the most efficient solution. The American healthcare industry is rapidly changing and with such changes come challenges, particularly financial, that require the assistance of seasoned professionals. Our national healthcare restructuring practice assists clients experiencing financial or operational issues requiring strategic legal advice or seeking acquisition opportunities in this current challenging environment. We possess the legal and business acumen, gained from years of relevant experience, to provide guidance required to navigate these challenging times. Our diverse client base includes hospitals and healthcare systems (for-profit and tax-exempt), long-term care facilities, surgicenters, imaging centers, physician practices and ventures, investors, and healthcare technology companies.
Our services include:
- Refinancings and recapitalizations
- Negotiation of new arrangements with payors, lenders, landlords, vendors, unions and other third parties
- Mergers, acquisitions, dispositions, joint ventures, and other transactions related to a reorganization
- Reorganizations and business protection, including consensual, out-of-court restructurings and chapter 11 filings
Our team draws primarily upon the experience of our Business Restructuring Department and Healthcare Practice Group, both of which provide services nationwide. The team is also able to call upon other relevant practice areas to provide clients with a full range of services to address complex and high-stakes business and legal issues. We understand the healthcare marketplace and the various factors that impact the financial and operational viability of healthcare companies. Our experience working with healthcare providers to address problems – including substantial experience assisting distressed healthcare providers through the chapter 11 process – enables us to identify and implement reorganization action plans. We also recognize the need to work effectively with a client's other advisors, creating a team environment resulting in practical and timely solutions.
Representative healthcare restructuring projects include the following:
- Forum Health et al. (U.S. Bankruptcy Court, N.D. of Ohio). Primary healthcare provider based in Youngstown, Ohio, with over $100 million of secured debt. Resulted in a successful sale to Community Health Systems and continuing operation of the hospital facilities.
- Representation of a hospital in the sale of its home health care business.
- Representation of a West Virginia-based hospital in a substantial out-of-court restructuring.
- Representation of secured lender for Florida-based critical access hospital.
- Hawaii Medical Center, LLC, et al. (U.S. Bankruptcy Court, Hawaii). Primary healthcare provider located in Honolulu, Hawaii, with over $50 million of secured debt. Resulted in successful confirmation of a plan of reorganization. Subsequently re-filed chapter 11 resulting in hospital facilities being acquired by St. Francis Healthcare System of Hawaii.
- Cheboygan Memorial Hospital (U.S. Bankruptcy Court, Michigan). Critical care access hospital located in Cheboygan Michigan. Resulted in successful sale to McLaren Health Care and continuing operation of the hospital facilities.
- Pontiac General Hospital and Medical Center, d/b/a North Oakland Medical Center, et al. (U.S. Bankruptcy Court, Michigan). Representation of creditors' committee, including participation in negotiations surrounding sale of the hospital facilities, and, subsequently, the liquidating trustee, assisting in the recovery of remaining assets and distribution to general unsecured creditors.
- Bucyrus Community Hospital, et al. (U.S. Bankruptcy Court, Ohio). Critical care access hospital located in Bucyrus, Ohio. Resulted in successful sale to Galion Community Hospital, Avita Healthcare System and continuing operation of the hospital facilities.
- Twin City Hospital (U.S. Bankruptcy Court, Ohio). Critical care access hospital located in Dennison, Ohio. Resulted in successful sale to Franciscan Services Corporation and continuing operation of the hospital facilities.
Long-Term Care Facility Representations
Medical Facility Representations
- Representations of separate multi-location laser surgery centers in successful debt restructuring and in a wind down that enabled the owners to avoid personal liability
- Representation of a plastic surgery center in the wind down of operations and transition of practice to another facility
- Representation of a medical laboratory in forbearance agreement with bank lender, obtaining replacement of its bank line of credit, exploration of strategic alternatives and representation of its company in its ultimate sale to investor group
Relevant Client Alerts
Laboratory Restructuring Services
The laboratory industry, similar to almost every other sector of healthcare, is in uncharted waters. Healthcare reform has added to the uncertainty by accelerating previously existing trends while introducing new concerns. Third party payor and government reimbursement rates, already under pressure, are being further reduced. For smaller providers, consolidation through mergers or affiliations appears to be the trend, if not an outright necessity. Those that choose to “go it alone” find themselves shut out of networks.
The capital structure of many clinical, anatomic pathology and molecular laboratories makes the challenges they face particularly acute. Often small, privately held and thinly capitalized, they do not have the ability to raise new equity. Moreover, private equity firms have, in light of uncertainties generally plaguing healthcare, become more cautious about investing in laboratories.
A laboratory facing financial, operational or even existential issues cannot afford to have its advisors “learning on the job.” Rather, it should – it must – turn to advisors that have years of experience representing healthcare providers, including laboratories.
At McDonald Hopkins, we are able to call upon decades of institutional experience in a variety of healthcare representations, including our work for dozens of clinical, anatomic pathology and molecular laboratories. In addition, our Healthcare Restructuring Practice is recognized as one of the most experienced groups in the country in representing healthcare providers. Our attorneys understand the challenges facing laboratories, including cost-cutting by managed care organizations, cutthroat competition, the lack of capital sources, and a shortage of skilled workers in many markets. We do not purport to be able to solve all of these challenges, but our experience and expertise allows us to offer suggestions and guide clients through (often-traumatic) changes.
- Mergers, acquisitions, dispositions, joint ventures, and other transactions in distressed situations
- Negotiation of new arrangements with investors, lenders, landlords, vendors, unions, payers and other third parties
- Business protection, including consensual, out-of-court restructurings and chapter 11 filings
- Accreditation and licensure
- Data privacy and network security
- Managed care contracting
- Strategic planning under healthcare reform
Representative Laboratory Representations
Our restructuring and non-restructuring laboratory clients number in the hundreds. Below is just a small sampling of those clients and the work we have done for them (with names removed to preserve confidentiality).
- Ohio-based pathology laboratory, in a sale to a multi-facility system
- Muncie, Indiana, laboratory, in a sale to a national system
- California-based hospital, in a sale of its outreach laboratory business
- Massachusetts-based laboratory, in a sale to a private equity group
- Torrence, California, pathology laboratory, in a recapitalization
- Seattle, Washington, laboratory, in a strategic alliance transaction
- Multi-state laboratory system, as special counsel in its restructuring
- Florida pathology laboratory, in an asset sale