By The Star Staff
Grupo HIMA San Pablo hospital system has asked a bankruptcy judge for an extension until early 2024 of the company’s exclusive rights to file and solicit votes on a Chapter 11 restructuring plan.
Grupo HIMA filed an exclusivity extension motion last week in its Chapter 11 case in the U.S. Bankruptcy Court for the District of Puerto Rico.
The hospital operator said it is on track to close on pending hospital sales to shift its attention and resources toward crafting, developing and reconciling the sale strategy with its intent to build up a plan to propose to creditors.
“An extension of the exclusive periods is in the best interest of the Debtors, the estate, creditors, and all stakeholders,” HIMA said.
If granted, the request for an additional 45 days of exclusivity would move Grupo HIMA’s plan filing deadline to Jan. 29, with the corresponding solicitation deadline moving to March 29.
Grupo HIMA filed for bankruptcy on Aug. 15, 2023. Since the petition, it has focused on preserving operations and reconciling them with the ongoing proceedings.
The extension intends to give Grupo HIMA an adequate opportunity to stabilize its business operations at the outset of the case and negotiate a plan with its creditors.
Grupo HIMA said it has been immersed in a complex sale effort aimed at transferring no fewer than four hospitals and other operational assets as a going concern.
“Those tasks may seem customary in a reorganization case,” Grupo HIMA said. “However, when coupled with being required to improve profitability and keep up the day-to-day operations of a highly complicated business basically ‘COD’ (cash on demand), with critical cash constraints, while pursuing a complex sale process, such circumstances impose a tantamount task upon the debtors, its personnel, and professionals.”
“Despite the progress, work remains to be done, and such work requires an extension of the debtors’ exclusive periods,” the operator added.
The hospital said it meets the criteria set for the extension, including the existence of good faith progress toward reorganization. the fact that the debtors are paying their bills as they come due, the size and complexity of the cases, the necessity of sufficient time to permit the debtors to negotiate a plan of reorganization and prepare adequate information to allow a creditor to determine whether to accept such a plan, and whether the debtors have demonstrated reasonable prospects for filing a viable plan, among others.
The debtors said they are not seeking an extension of their exclusive periods to pressure creditors. To the contrary, hospital officials said they have cooperated and worked constructively and in good faith with all of the creditors’ officers in the four months since the filing.