Nursing home operator postpones final hearing on bankruptcy plan

  • Judge questions use of non-public report to support plan
  • The hearing will resume on April 27

(Reuters) – The judge overseeing the bankruptcy of Gulf Coast Health Care LLC has pushed back the final hearing on its proposed liquidation plan until next week to allow opponents of the deal to consider a report that analyzes potential litigation against persons and entities associated with the bankrupt retirement home operator.

The report, which was not public, became a point of contention on Tuesday, which was expected to be the first full day of hearings on the plan. But hours into the hearing, U.S. Bankruptcy Judge Karen Owens in Wilmington, Delaware, expressed frustration as Gulf Coast witnesses attempted to rely on the report’s findings in their testimony, despite the fact that the report itself was kept secret.

“It’s problematic,” Owens said.

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In response to the judge’s remarks, Gulf Coast attorney Daniel Simon of McDermott Will & Emery said his team would make the report available to the judge and opponents of the plan by the end of the day. The hearing will resume on April 27.

Gulf Coast, which operated 28 retirement homes in Florida, Georgia and Mississippi when it filed for bankruptcy in October, has transferred its facilities to new operators and is now awaiting approval from Owens to begin the liquidation process. . But he faces opposition from the U.S. trustee, the federal government’s bankruptcy watchdog, and plaintiffs who have accused the company of patient deaths and injuries.

They argue that the plan erroneously includes protections from future litigation, known as non-debtor releases, for people and entities connected to the company, including shareholders, officers and service providers, but who are not bankrupt themselves.

Gulf Coast lawyers argue that these releases were necessary to obtain financial contributions for the recovery of creditors.

The case is In re Gulf Coast Health Care LLC, US Bankruptcy Court, District of Delaware, No. 21-11336.

For the Gulf Coast: David Hurst, Daniel Simon and Emily Keil of McDermott Will & Emery

For the American administrator: Joseph McMahon and Juliet Sarkessian

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