Wayne State University is fronting what could potentially total more than $16 million in payments for the School of Medicine's faculty practice, University Physician Group, to rebuild after bankruptcy, Crain's Detroit Business reported. The U.S. Bankruptcy Court in Detroit last Monday approved UPG's reorganization plan and exit from bankruptcy after the nonprofit medical practice suddenly filed for chapter 11 protection in November. After "extensive negotiations" with UPG, Wayne State agreed to provide financial assistance under a restructuring support agreement, according to a version of the reorganization plan submitted April 9. Wayne State is, in essence, acting as a bank, providing exit financing to UPG for general unsecured creditor claims (it's excluding claims by Wayne State and an affiliated nonprofit Fund for Medical Research and Education). A 15-year term loan from Wayne State will be used to pay 80 percent of unsecured claims that are currently projected at approximately $10.7 million, but could rise as court proceedings are finalized, according to a document in the U.S. Bankruptcy Court in Detroit. The Detroit university is also providing a revolving loan of at least $2.5 million that could range up to $7.5 million for UPG's working-capital needs.
