A judge approved Gulf Coast Health Care’s modified Chapter 11 liquidation plan this week. This was the second amended joint plan the company submitted after the first one was rejected.
The original plan was reportedly rejected for not meeting its burden to sign away creditors’ claims against third parties.
The new plan provides at least $10 million for unsecured creditors, which includes former residents alleging personal injury and wrongful death actions, according to Bloomberg.
Judge Karen B. Owens of the U.S. Bankruptcy Court for the District of Delaware approved the plan in an order signed June 27.
Gulf Coast at one time had 28 SNFs in Florida, Georgia and Mississippi but filed for Chapter 11 bankruptcy in October 2021, citing “significant fiscal challenges” stemming from the pandemic.
The majority of its portfolio, 24 facilities, were previously leased from certain indirect affiliates and subsidiaries of Omega Healthcare Investors (NYSE: OHI). The other four were leased from certain indirect affiliates and subsidiaries of Eagle Arc Partners LLC.
Omega sold 22 of its 24 previously leased and operated Gulf Coast facilities for more than $318 million in cash in May. The net cash proceeds, including related costs, were $304 million — amounting to a net gain of approximately $113.5 million.
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