Health Care

Lien Stripping: Is It Worth It?

In In re Lane,( George Lane, et. Al v. Western Interstate Bancorp), 280 F.3d 663 (6th Cir. 2002), the Sixth Circuit Court of Appeals, following the direction of the U.S. Supreme Court’s decision in Nobleman v. American Savings Bank, 508 U.S. 324, 113 S.Ct. 2106 (1993), held that §1322(b)(2), or what is commonly known as the anti-modification clause, did not protect an unsecured mortgage-holder from modification of its lien through the chapter 13 plan process.

Dealing with Automobile Leases Post-BAPCPA

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) added a new provision regarding personal property leases, §365(p), which provides:

(1) If a lease of personal property is rejected or not timely assumed by the trustee under subsection (d), the leased property is no longer property of the estate and the stay under §362(a) is automatically terminated.

Chapter 7 Debtor May Not Expense 26 U.S.C. §401(k) Loan Repayment

The US Court of Appeals for the Ninth Circuit recently affirmed a bankruptcy court’s decision to dismiss a chapter 7 case pursuant to §707(b)(3) in In re Egebjerg.[1] The bankruptcy court concluded that the debtor’s loan from his §401(k) plan was a secured loan, repayment of which can be expensed pursuant to §707(b)(2)(A)(iii). Nevertheless, the court found that the debtor could pay a significant portion of his debts after the loan was repaid, finding the case abusive under §707(b)(3).

Distressed Health Care Financing in the New Economy

About the author: Peter Hartheimer serves as the lead principal in General Capital Partners LLC in its New York office.

How the world has changed. There was a time when, if a nursing home was experiencing financial difficulty, they went to their current lender and asked for an extension or additional capital. If they had to file for chapter 11 protection, they would secure debtor-in-possession (DIP) financing from the current lender or choose from a bevy of alternative lenders and factors.

Bailing Out the Government - Chapter 9 for Health Care Districts

With state and local governments facing daunting financial challenges, chapter 9 for "government units" is becoming a more likely option. In California, state law permits communities to form "health care districts" that are authorized to issue bonds through public offerings and use the proceeds to establish health care facilities within the district. When a health care district files a chapter 9 case, the intersection between public finance, health care law and bankruptcy creates its own set of novel problems.

Will Nursing Homes Survive The Implementation Of Programs Designed To Prevent Institutionalized Care?

There is no question that the nursing home industry has been battered by bankruptcies and receiverships in recent years, sometimes resulting in the closing of the home. Many factors have impacted the financial viability of nursing homes, not the least of which is the fact that nursing homes depend on Medicare and Medicaid for most of their revenues. Another factor has been the inability of many nursing homes to fill beds because of overbedding. The excess capacity is problematic because it further reduces a nursing home's revenues when its financial stability is already teetering.

The Utilization of §363 Sales in the Health Care Industry

Bankruptcy Code §363 asset sales are becoming an increasingly attractive method employed by companies in the health care industry to monetize assets. My firm has seen the impact in our own caseload with three diagnostic imaging facilities (DIFs) we are advising recently utilizing 363 sales.

National Health Care Cases Survive BAPCPA

Health Care Committee Members Paul Rundell and Bobby Guy advise of 10 jointly administered cases before the U.S. Bankruptcy Court for the Middle District of Tennessee (Middle District) in which the debtors prevailed over arguments by the U.S. Trustee for Region 8 (UST) to the effect that BAPCPA effectively eliminated national health care cases. In those 10 cases, Nashville Senior Living LLC and nine other senior living affiliates of a large national senior living company filed chapter 11 petitions.

Of Patient Care Ombudsmen and Asset Sales: 2008 Cases of Interest to Health Care Law Practitioners in Bankruptcy Cases

This article examines four 2008 patient care ombudsman cases. In re Bridgeport Holdings Inc., __ B.R. ___, 2008 WL 2235330 (Bankr. D. Del. May 30, 2008), is not a health care case, but it provides important warnings to the directors and officers of health care businesses considering sales of the business or its assets. I am grateful to the Health Care Committee's Listserve Moderator, Bobby Guy, for pointing my attention to the Bridgeport Holdings case and its relevance to health care-related insolvencies.

According to a Recent Survey Conducted by Waller Lansden Dortch & Davis LLP, "Hospital Investments in Competitiveness: Financing Options," Many Hospitals Plan Significant Expenditures, but Expect to Fund Them by Traditional Means.

Waller Lansden Dortch & Davis, LLP (Waller Lansden), home to one of the United States' largest and most comprehensive healthcare law practices, conducted a survey of hospitals entitled "Hospital Investments in Competitiveness: Financing Options." Waller Lansden published the survey in the December issue of HealthLeaders. According to Reggie Hill, the head of Waller Lansden's health care industry practice: