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Orianna Health Systems LLC is “within striking distance” of a broad settlement that could resolve considerable opposition to its chapter 11 restructuring plan, its lawyer said yesterday, WSJ Pro Bankruptcy reported. During a hearing at the U.S. Bankruptcy Court in Dallas, Orianna attorney Thomas Califano told Judge Harlin DeWayne Hale the nursing-home operator is closing in on a resolution to the contentious case with the help of a mediator. Judge Hale approved the appointment of a mediator, retired bankruptcy judge Bruce Markell, earlier this month, hoping he could help Orianna, its landlord, creditors and the restructuring plan’s sponsor work out their remaining differences. Califano said that he expects to have an update for Judge Hale by Friday. Earlier this month, Orianna held an auction for about half of its nursing facilities. Court papers say that the lead bidder, SC-GA 2018 Partners LLC, came out on top after several rounds of bidding.

Creditors Tuesday persuaded an investment group offering to buy Elements Behavioral Health Inc. to make a key concession in the bidding for the debt-burdened addiction-rehabilitation center, WSJ Pro Bankruptcy. An investment vehicle that includes hedge fund BlueMountain Capital and Platinum Health Care founder Ben Klein has set its sights on Elements Behavioral, and will lead the bidding at a planned July bankruptcy auction. The buyout group is also Elements Behavioral’s top-ranking lender, and, as such, was in position to dominate the auction, creditors feared. At a hearing yesterday in the U.S. Bankruptcy Court in Wilmington, Del., the BlueMountain buyout group agreed to limit the amount of “credit-bidding” it will do to $65 million.

Gilbert (Ariz.) Hospital and Florence (Ariz.) Hospital at Anthem, both owned by Gilbert-based New Vision Health, provided little notice before shutting down, Becker's Hospital Review reported. The two hospitals entered chapter 11 bankruptcy in late May after creditors filed involuntary bankruptcy petitions for the hospitals, seeking to collect $1.96 million they claim the hospitals owe. In court documents filed May 1, creditors claimed that the two Arizona hospitals failed to make lease payments for months and that the facilities are "on the brink of complete shutdown." The two Arizona hospitals failed to contest the petition within the required 21-day timeline, and the court subsequently granted creditors' request for relief through the chapter 11 bankruptcy process. The financial troubles forced the two hospitals to close. After initially announcing the two facilities would close June 15, officials slightly extended the timeline. Gilbert Hospital closed June 16 and Florence Hospital closed June 18, according to azcentral.com.

Gilbert (Ariz.) Hospital and Florence (Ariz.) Hospital entered chapter 11 bankruptcy in late May after creditors sought to force the hospitals into bankruptcy in an attempt to collect $1.96 million they claim the affiliated hospitals owe, according to Becker's Hospital CFO Report. In late April, three employees jointly filed the involuntary bankruptcy petition for Florence Hospital, seeking $46,650 in wages. Gilbert Hospital's involuntary bankruptcy petition, which seeks more than $1.9 million, was filed by the hospital's founder and CMO Timothy Johns, MD, an unsecured creditors' trust and a Phoenix-based law firm. After creditors ask the court to initiate bankruptcy proceedings, the debtor has the opportunity to contest the petition. The two Arizona hospitals failed to contest the petition within the required 21-day timeline, and the court subsequently granted creditors' request for relief through the chapter 11 bankruptcy process. Read more. 

For more on hospital and health care insolvencies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition from the ABI Bookstore. 

Elements Behavioral Health Inc., which operates the addiction-rehabilitation center where actress Lindsay Lohan and singer Britney Spears sought treatment, filed for chapter 11 bankruptcy protection yesterday with a deal to a group that includes hedge fund BlueMountain Capital and Platinum Health Care founder Ben Klein for $65 million, WSJ Pro Bankruptcy reported. The privately owned company, based in Long Beach, Calif., was exploring a sale earlier this year. The company had previously considered a sale in 2014 when it was projected to produce $25 million in earnings before interest, taxes, depreciation and amortization.

Bridgeport Health Care Center, which filed for bankruptcy on April 18, was raided yesterday, according to the union representing most of the facility’s workers, the Connecticut Post reported. Sherrie Weller, president of AFSCME Local 1522, said she knows little about the substance of the raid, but knows that a warrant was served and that FBI, Department of Labor staff and other law enforcement were on site yesterday morning. Weller and a small group of the workers staged a press conference and protest at the nursing home — which employs about 400 people — in early April, alleging that the workers weren’t getting paid on time, that there were insufficient funds deposited in their credit union and the company is failing to pay the third-party administrator that manages the workers’ health care benefits. At the time of their protests, the union and the workers laid much of their woes at the feet of the health care center’s chief financial officer Chaim Stern. Stern has been embattled for some time. In 2016, the U.S. Department of Labor sued him for allegedly diverting $4 million in retirement plan assets to a New York-based religious corporation and to himself.