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Williamson Memorial Hospital in West Virginia filed for chapter 11 protection on Monday, the Associated Press reported. Williamson, W.Va.-based Mingo Health Partners LLC bought the 76-bed hospital from Franklin, Tenn.-based Community Healthcare Systems in 2018. The filing lists at least 50 creditors, including $651,000 owed to CHS and $486,000 to Ohio Valley Physicians, an emergency department staffing company based in Huntington, W.Va. The filing lists the hospital's assets and liabilities both at between $1 million and $10 million.

Medical Depot Inc. has completed an out-of-court restructuring in which private-equity owner Clayton, Dubilier & Rice LLC injected new money to maintain control of the company, WSJ Pro Bankruptcy reported. Medical Depot, which operates under the name Drive DeVilbiss Healthcare and manufactures wheelchairs, canes, walkers and other medical equipment, eased a liquidity crunch with a restructuring deal that involves $35 million in financing from Clayton Dublier. Junior lenders exchanged their claims into new debt that pays interest in-kind, meaning with debt instead of cash, and received a slice of preferred equity as well. Senior loans were reinstated, according to sources. Medical Depot was formed in 2015 through the merger of Drive Medical and DeVilbiss Healthcare and was acquired by Clayton Dubilier in 2016. The company has struggled since the combination. Medical Depot, which had roughly $600 million of debt prior to the restructuring, was advised by Kirkland & Ellis LLP and Evercore Inc., while Clayton Dubilier was advised by Debevoise & Plimpton LLP. Junior lenders were advised by Paul, Weiss, Rifkind, Wharton & Garrison LLP.

The Pension Benefit Guaranty Corp. is taking over two pension plans sponsored by Verity Health System of California, a bankrupt nonprofit that is being acquired by the KPC Group, Pensions & Investments reported. The Verity Health System Retirement Plan A is estimated to be 52 percent funded, with $306 million in underfunding, while the Verity Health System Retirement Plan B is estimated to be 74 percent funded, with $2.8 million in underfunding. Verity and 16 affiliates filed for chapter 11 protection in the U.S. Bankruptcy Court in Los Angeles on Aug. 31, 2018, after amassing more than $1 billion in bond debt in addition to the unfunded pension liability and other fiscal demands, according to court documents. KPC Group is the parent company of KPC Health, operator of seven hospitals in Southern California. KPC Group made a $610 million stalking-horse bid for St. Francis Medical Center, St. Vincent Medical Center, Seton Medical Center and several other facilities.

OxyContin maker Purdue Pharma LP will ask a bankruptcy judge today to pause litigation against the company and its owners over the objections of U.S. states that allege the company is trying to protect the controlling Sackler family, Reuters reported. Purdue’s request promises to be one of the most contentious of the company’s chapter 11 case, which was filed in September to try to implement a settlement proposal it values at more than $10 billion. Privately held Purdue said last month it needed to pause more than 2,600 lawsuits so the company can reduce legal costs and try to win over more plaintiffs to its proposed deal. The lawsuits accuse Purdue and the Sacklers of fueling a public health crisis by aggressively marketing opioids while downplaying their overdose risks, contributing to some 400,000 deaths from 1999 to 2017, according to U.S. statistics. The company said that it has the support of a majority of the local governments that brought the bulk of the lawsuits, although at least 24 states oppose the deal. Read more. 

In related news, Bankruptcy Judge Robert Drain yesterday urged parties that will benefit from a proposed settlement with OxyContin maker Purdue Pharma LP to focus on addressing the opioid addiction crisis and avoid battling over the deal’s billions of dollars, Reuters reported. The outline of a proposed settlement that Purdue values at more than $10 billion was filed in the U.S. Bankruptcy Court in White Plains, N.Y., on Tuesday. The deal aims to resolve more than 2,600 lawsuits by states, local governments and other plaintiffs against Purdue and its Sackler family owners. The lawsuits accuse them of fueling a public health crisis by aggressively marketing opioids while downplaying their overdose risks, contributing to some 400,000 deaths from 1999 to 2017, according to U.S. statistics. “No one can ignore the individual people affected by this crisis,” Judge Drain said at a hearing yesterday. “So I hope that you all will be able to work together to use the money as wisely as possible.” Judge Drain urged the parties to consider ways to distribute settlement funds quickly, rather than follow the usual bankruptcy practice of evaluating each creditor claim before making payments. Read more. 

A Kansas City-based company that specializes in turning around financially distressed hospitals is proposing to purchase Hillsboro Community Hospital in rural Kansas for $6.9 million, KCUR.org reported. The company, Rural Hospital Group, was formed in 2017 and has acquired three other rural hospitals: one in Wellington, Kansas; another in Boonville, Missouri; and a third in Marion, Kentucky. It has since sold the hospital in Boonville. Hillsboro Community Hospital was placed in receivership in January and then in chapter 11 protection after its previous owner defaulted on its bills and other financial obligations. Through a subsidiary, Rural Hospital Group has submitted a stalking-horse bid for Hillsboro. So far, Rural Hospital Group appears to be the only bidder. “We have signed an asset purchase agreement, which starts the stalking horse process,” said Dennis Davis, one of RHG’s principals. Davis said he expects the purchase to close before the end of the year. The 15-bed hospital has endured multiple owners and a bankruptcy over the last couple of years. In 2017, its operations were taken over by a group of Miami businessmen led by Jorge Perez, a group that had acquired control of nearly two dozen distressed rural hospitals across the U.S. Last week, a member of the group, David Byrns, was charged in federal court in Kansas City with one count of conspiracy to commit health care fraud. Byrns was CEO of Putnam County Memorial Hospital in Unionville, Missouri, another 15-bed hospital taken over by Perez’s group before it was ousted by the hospital’s board of trustees. 

OxyContin maker Purdue Pharma LP steered up to $13 billion in profits to the company’s controlling Sackler family, according to U.S. states opposing efforts to halt lawsuits alleging the company and its owners helped fuel the U.S. opioid epidemic, Reuters reported. The Sacklers received the money from Purdue during an unspecified time frame, according to court documents and portions of a deposition filed in the drugmaker’s bankruptcy proceedings this week. Purdue ultimately transferred $12 billion or $13 billion to the family, a company adviser testified in the deposition. The deposition, taken last week, was revealed in court filings on Thursday and Friday. The financial figure is significantly larger than the roughly $4 billion previous lawsuits have alleged the Sacklers took out of Purdue, and was cited as part of coordinated legal broadsides this week against the company’s attempts to shield itself and the family from sprawling opioid litigation. Many states want the Sacklers to contribute more than an initial $3 billion they have pledged toward resolving the lawsuits as part of a settlement Purdue has proposed. Attorneys general from 24 states and the District of Columbia on Friday objected to Purdue’s September request that a U.S. bankruptcy judge halt more than 2,600 lawsuits seeking billions of dollars in damages, and they raised financial transfers to the Sacklers in their legal arguments.