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A suburban Chicago senior living retirement facility is on track to exit bankruptcy next month — for the second time — with creditor voting now underway and conduit issuer approval for its restructuring bonds in hand, Bond Buyer reported. The restructuring gives the facility more breathing room by requiring bondholders to take a haircut and wait longer to recoup their investment. The Park Place of Elmhurst, in the western Chicago suburb of Elmhurst, filed for chapter 11 bankruptcy in December after reaching agreement on a restructuring with holders of a majority of principal from the $141 million remaining from $146 million of bonds issued in 2016 through the Illinois Finance Authority. The COVID-19 pandemic, which has hit many retirement communities hard, hasn’t helped the facility’s fiscal woes but it’s not blamed for the restructuring, its second since opening in 2012. Park Place, which has 300 residents, has fared well compared to many peers. The 2016 bonds were issued to exit its previous bankruptcy in exchange for the remaining principal from the initial $175.5 million unrated 2010 issue. The court approved the facility’s disclosure statement at a hearing late last month and the IFA signed off on the restructuring bonds at its monthly meeting earlier this month. Creditor voting, which includes bondholders, ends March 5 and a confirmation hearing is set for March 16 in the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, according to trustee filings.

Chicago’s Mercy Hospital and Medical Center, the oldest chartered hospital in the city, has had financial problems since the 1990s, culminating in a bankruptcy filing Wednesday, Bloomberg News reported. Its story is emblematic of the challenges facing its patients and a large swathe of U.S. hospitals also struggling to survive. Mercy, a fixture on Chicago’s South Side, takes on sicker people than some of its competitors, and many of its patients lack private insurance that reimburses at higher rates. It’s also suffered as more treatment moves outside hospitals. Mercy sought court protection after Illinois health officials rejected a plan to close the hospital and replace it with an outpatient center. Even before the pandemic slammed hospitals, forcing them to pay up for protective equipment and cancel many profitable elective procedures, the divide between centers like Mercy and richer facilities was widening. “Hospitals in surrounding areas have made investments in outpatient services, which, along with new and updated facilities, allowed them to dominate positive consumer opinions in the market and siphon off commercial patients, Medicare patients and outpatients,” Chief Executive Officer Carol Garikes Schneider, who’s run the hospital since 2013, said in a court filing on Thursday. Felicia Gerber Perlman, who co-heads the bankruptcy and restructuring group at law firm McDermott Will & Emery in Chicago and isn’t involved in the case, said Mercy’s bankruptcy could herald a wave of similar filings among providers in lower-income, urban areas. Those hospitals share some challenges with rural facilities that have seen revenues and patient bases shrink. Mercy’s patients suffer “disproportionately” from chronic diseases that would benefit from early detection and monitoring in an outpatient setting, Schneider said in the filing that detailed years-long efforts to save the institution.

Mercy Hospital and Medical Centers filed for chapter 11 protection yesterday just months before the historic Bronzeville, Ill., hospital is expected to shutter its doors for good, the Chicago Sun Times reported. Mercy, which is owned by Trinity Health, still plans to cease operations of all its departments — other than basic emergency services — May 31. The controversial hospital closure is on the agenda for the Illinois Health Facilities & Services Review Board meeting on Mar. 16. In a statement, Mercy, the city’s first hospital, said that it was losing staff and experiencing “mounting financial losses” which challenged its ability to maintain a safe environment. The hospital lost more than $30.2 million in the first six months of the fiscal year, averaging about $5 million per month, the statement said. In debt of more than $303.2 million over the last seven fiscal years, the hospital said a minimum capital investment of over $100 million was needed for it to safely carry on its services. The chapter 11 bankruptcy filing news comes two weeks after a state review board rejected Trinity Health’s proposal to open an urgent care and diagnostic center on the South Side. The same board unanimously rejected a plan in December to close Mercy.

A year into the pandemic, the disposable, virus-filtering N95 mask remains a coveted piece of protective gear. Continuing shortages have forced doctors and nurses to reuse their N95s, and ordinary Americans have scoured the internet — mostly in vain — to get them. But Luis Arguello Jr. has plenty of N95s for sale — 30 million of them, in fact, which his family-run business, DemeTech, manufactured in its factories in Miami. He simply can’t find buyers, the New York Times reported. After the pandemic exposed a huge need for protective equipment, and China closed its inventory to the world, DemeTech, a medical suture maker, dived into the mask business. The company invested tens of millions of dollars in new machinery and then navigated a nine-month federal approval process that allows the masks to be marketed. But demand is so slack that Mr. Arguello is preparing to lay off some of the 1,300 workers he had hired to ramp up production. In one of the more confounding disconnects between the laws of supply and demand, many of the nearly two dozen small American companies that recently jumped into the business of making N95s are facing the abyss — unable to crack the market, despite vows from both former President Donald Trump and President Biden to “Buy American” and buoy domestic production of essential medical gear. These businesses must overcome the ingrained purchasing habits of hospital systems, medical supply distributors and state governments. Many buyers are loath to try the new crop of American-made masks, which are often a bit more expensive than those produced in China. Another obstacle comes from companies like Facebook and Google, which banned the sale and advertising of N95 masks in an effort to thwart profiteers from diverting vital medical gear needed by frontline medical workers. What’s required, public health experts and industry executives say, is an ambitious strategy that includes federal loans, subsidies and government purchasing directives to ensure the long-term viability of a domestic industry vital to the national interest.

State attorneys general intensified pressure on drug companies to settle claims over the opioid crisis, following consulting firm McKinsey & Co.’s agreement to pay nearly $600 million over its advice to pharmaceutical companies to rev up sales, the Wall Street Journal reported. McKinsey’s settlements, reached with every state but Nevada, are an unexpected first source of revenue to stem from yearslong investigations into drug industry players that states say helped exacerbate an opioid epidemic. It has killed at least 400,000 people in the U.S. since 1999. “We do not want to be in litigation for years on this, spending money and resources while people are dying,” Colorado Attorney General Phil Weiser said Thursday. “We want to get fair settlements now. Others need to follow suit.” States have been negotiating since 2019 with the nation’s three largest drug distributors, McKesson Corp., AmerisourceBergen Corp., Cardinal Health Inc., as well as drugmaker Johnson & Johnson. The companies have publicly disclosed that they have set aside a collective $26 billion for the deal, most of it to be paid over 18 years, but no final agreement has been reached.

McKinsey & Company has agreed to pay $573 million to settle investigations into its role in helping “turbocharge” opioid sales, a rare instance of it being held publicly accountable for its work with clients, the New York Times reported. The firm has reached the agreement with attorneys general in 47 states, the District of Columbia and five territories, according to five people familiar with the negotiations. The settlement comes after lawsuits unearthed a trove of documents showing how McKinsey worked to drive sales of Purdue Pharma’s OxyContin painkiller amid an opioid epidemic in the United States that has contributed to the deaths of more than 450,000 people over the past two decades. McKinsey’s extensive work with Purdue included advising it to focus on selling lucrative high-dose pills, the documents show, even after the drugmaker pleaded guilty in 2007 to federal criminal charges that it had misled doctors and regulators about OxyContin’s risks. The firm also told Purdue that it could “band together” with other opioid makers to head off “strict treatment” by the Food and Drug Administration. The consulting firm will not admit wrongdoing in the settlement, to be filed in state courts today, but it will agree to court-ordered restrictions on its work with some types of addictive narcotics, according to those familiar with the arrangement. McKinsey will also retain emails for five years and disclose potential conflicts of interest when bidding for state contracts. And in a move similar to the tobacco industry settlements decades ago, it will put tens of thousands of pages of documents related to its opioid work onto a publicly available database.

A group of Democratic senators proposed new legislation yesterday that would provide relief to individual debtors who file for bankruptcy due to medical costs or who have lost their jobs and health insurance, Law 360 reported. The Medical Bankruptcy Fairness Act of 2021 was proposed by Sen. Sheldon Whitehouse (D-R.I.) and co-sponsored by Sens. Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), Tammy Baldwin (D-Wis.), and Richard Blumenthal (D-Conn.). It would streamline bankruptcy procedures for individual debtors whose financial troubles were caused by medical debt or public health-related shutdowns. Specifically, the bill would eliminate a requirement that debtors undergo credit counseling when they file for bankruptcy, which Sen. Whitehouse said makes little sense for people seeking court protection because of unanticipated medical costs that are largely out of their control. It also would significantly expand the dischargeability of student loan debt, which currently requires a debtor to pass a high bar of hardship to obtain. An increase in the protected amount of home equity to $250,000 for an individual debtor is also included in the proposal. Whitehouse has proposed similar legislation at least three times, with measures introduced in 2014, 2016 and most recently in July 2020 failing to come to a vote in the Senate. Warren was a co-sponsor of all three of the previous efforts.

Talks aimed at getting Purdue Pharma’s owners to increase their contribution to the opioid maker’s bankruptcy settlement have stalled, with members of the billionaire Sackler family resisting demands from states to boost their offer by more than $2 billion, Bloomberg News reported. The Sacklers are willing to add more than $1 billion to their cash contribution, bringing their total to more than $4 billion. But attorneys general for states involved in the court-ordered mediation are seeking more than $5 billion to beef up addiction treatment and police budgets. Another sticking point is the Sacklers’ demand that they face no state criminal charges over Purdue’s illegal marketing of the painkillers. Members of the Sackler family have consistently denied any personal wrongdoing. Negotiators are still trying to resolve objections to Purdue’s reorganization plan, which would help state and local governments pay for damage caused by OxyContin and other opioid-based drugs blamed for more than 400,000 deaths. All told, the plan may provide as much as $10 billion, but the value could plummet if there’s no agreement with the Sacklers. This would mean far less cash for government and possibly leave some family members open to personal liability.

Buffeted by COVID-19, struggling with crumbling finances, one of America’s largest nursing home chains gave its CEO a $5.2 million “retention payment” in late October, just as the second big wave of the pandemic was rising, the Washington Post reported. On Jan. 5, nonetheless, George Hager Jr. retired as head of Genesis HealthCare. He will have to pay an unspecified amount of the money back, to avoid certain tax liabilities, according to an SEC filing by the company, but he will apparently be reimbursed over the next two years. The Genesis board also agreed to give him an immediate $650,000 bonus and a $300,000 consulting contract, according to the filing. The company would not elaborate on the arrangement. Under Hager’s leadership the more than 300 Genesis nursing homes experienced 14,352 confirmed cases of COVID-19 through mid-December, according to reports the company made to Medicare officials. The total number of residents who died of the disease was 2,812, as of Dec. 20. Both figures are higher than in comparable nursing home chains.