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Tom, thank you for talking with me. I’ve been doing a lot work on CCRC cases, but it seems like your cases, and in particular I’m thinking about the Amsterdam restructuring, it seems like you get a very positive outcome. And I was wondering, what do you think is necessary for a successful restructuring case?
Whether a lease constitutes a lease of residential property or of nonresidential property can significantly impact the reorganization effort of a chapter 11 debtor-lessee. Questions may arise as to whether a lease entered into as part of a commercial transaction in which the debtor-lessee neither resides nor intends to reside in the leased premises constitutes a lease of residential or of nonresidential real property. Debtors operating skilled-nursing, assisted-living and other longer-term-care facilities should be aware of the implications of the residential/nonresidential determination.
Throughout the COVID-19 pandemic, health care organizations received substantial temporary funding relief. [1],[2] As this funding ends, financial difficulties existing prior to this public health emergency are resurfacing and may be more severe.
Hospitals and health care providers now face intensified pressures arising from the pandemic, with the American Hospital Association reporting that the cumulative impact of such conditions could raise the serious threat of bankruptcy or closure for providers.[1]
Of all the industries most adversely affected by the global pandemic, the nursing care sector — comprised of both post-acute and long-term-care providers — has suffered greatly. The pandemic presented unthinkable operational challenges to the skilled-nursing sector in particular, resulting in significant adverse financial consequences. Despite these challenges, the sector has demonstrated continued resilience and modest signs of recovery that provide cautious optimism for the continued vitality of the sector.
In less than 12 weeks, COVID-19 has disrupted life, perhaps more than any event in our generation. The nation’s response is remarkable for its teamwork, compassion and commitment, especially the health care community, which despite dire shortages of resources has unified to deliver its critical services to meet unprecedented demand. The U.S. Congress has passed several legislative actions to support individuals, small businesses and health care organizations.
While the Coronavirus Aid, Relief and Economic Security Act and the Paycheck Protection Program and Health Care Enhancement Act provided $175 billion in relief funds to health care providers generally, those funds were not devoted solely to hospitals and were distributed based on various criteria that did not correspond to financial need. Consequently, many rural and safety-net hospitals[1] still face extraordinarily daunting financial challenges.
