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Astria Health CEO John Gallagher said that it is making progress on its goal to emerge from bankruptcy protection by year’s end, the Yakima (Wash.) Herald reported. He again emphasized the “unique situation” that led to the organization filing for chapter 11 protection on May 6. Most health care systems and hospitals are forced into bankruptcy because their expenses or liabilities are far above their revenues and assets, he said. But in Astria’s case, a vendor was unable to collect $75 million in billing claims over nine months, causing a significant hit to cash flow. “We had a positive income statement,” he said. “We had a mechanical issue with our billing and collecting.” Since filing for bankruptcy protection, Astria Health has made progress on its billing and collection through a new revenue cycle vendor, Gallagher said. The improvement in collections has provided Astria Health and its facilities enough cash flow to continue day-to-day operations without having to tap all of the $36 million in debtor-in- possession financing approved by the court, Gallagher said. Most of the financing — approximately $21 million — was used to pay off two creditors, Banner Bank and MidCap Financial Trust. 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. 

Almost four months ago, the bankrupt estate of Sears Holdings Corp. sued Eddie Lampert and U.S. Treasury Secretary Steven Mnuchin over allegedly wrongful transfers of $2 billion in company assets, Bloomberg News reported. Now lawyers representing the two men have asked the federal judge overseeing the retailer’s chapter 11 case to lift the bankruptcy stay so Sears insurance policies can pay their legal fees, according to a new court filing. Before Sears went bankrupt in October, the company carried a $150 million insurance policy that covered its officers and directors against legal fees and expenses, according to the filing. Lampert was chairman of the Sears board starting in 2005 and chief executive officer from 2013, while Mnuchin was a director of Sears from 2005 until 2016, court papers show. “The director defendants should be permitted to immediately obtain reimbursement for their fees and expenses in accordance with the policies’ terms,” the filing states. Lawyers for a handful of other Sears directors, including Thomas Tisch, Alesia Haas, Kunal Kamlani and Bruce Berkowitz, also asked for the stay to be lifted so the insurance could pay their clients’ legal fees. The estate doesn’t object to lifting the stay for the insurance payments, according to the filing. 

A day after an investment report called Burford Capital insolvent, causing its stock prices to plummet, the litigation funder struck back by claiming that its initial investigation of the report shows signs of market manipulation, Law.com reported. Burford CEO Christopher Bogart said that Muddy Waters’ tactics behind the report are “deeply disgusting,” adding that Burford has built its business around corporate governance and transparency. Muddy Waters released the 25-page report on Wednesday, causing Burford’s stock to plummet 65 percent before rallying later in the day on London’s AIM exchange. The San Francisco due diligence-based investment firm had laid out seven different ways that Burford allegedly misrepresented the value of its investment portfolio. It also said Burford was a “a poor business masquerading as a great one” and that it was “arguably already insolvent.” In its written rebuttal, Burford said it will investigate Muddy Water’s actions, which show signs of market manipulation. “Short attacks such as this are a fundamental menace to an orderly market and to the value inherent in long-term investing in companies such as Burford that are revolutionising industries,” Burford wrote.