Bucktail Medical Center Moves to Exit Chapter 11 Reorganization

(Editor’s Note: For three years the Bucktail Medical Center has been battling for its financial life, forced into bankruptcy in 2015 to fend off creditors. Today the longtime western Clinton County institution is on the cusp of solvency once again, under the direction of Tim Reeves, BMC chief executive officer. Mr. Reeves provides good news to western Clinton County in his update:)

SOUTH RENOVO – “Nearly two years after filing for protection under Chapter 11 of the US Bankruptcy Code, Bucktail Medical Center (BMC) is moving to emerge with a fresh start. The terms of the plan have been determined, negotiations with key vendors are complete, final details of exit are underway and the judge has set dates for creditors to vote on the plan and for a Confirmation Hearing.

“Negotiating with vendors and refinancing existing long term debt are key components of this plan. Working with key vendors, we were able to put together a plan where everyone is treated equally and the cures for the debts are within BMC’s means. By reaching agreements as part of the plan, BMC anticipates that those vendors will vote in favor of the plan.

“Having refinancing of the long term debt included in the plan further strengthens the plan and illustrates the bank’s willingness to work with the medical center moving forward.

“With key vendors on board and financing in place, BMC presented a comprehensive plan illustrating the ability to move forward. A hearing on the Amended Disclosure Statement to accompany the Plan of Reorganization was held on July 11, 2017. On July 19, 2017 the court announced dates for voting and for the plan confirmation hearing.

“Creditors are divided into 17 different classes depending on the type of claim they hold. Secured vendors are a separate class, creditors with priority claims are a separate class, employees are a separate class and unsecured creditors are a class. The various classes have the opportunity to vote for or against the Plan as provided for in the plan. Each vote in each class is counted first as a roll call vote; 50 percent plus one must vote in favor of the plan. Each vote is then counted a second time; 2/3 of the money involved in the class must vote in favor of the plan.

“It is important to understand that only votes cast will be counted. A vendor who does not vote has no influence on the outcome. Votes from each class are counted. If there are ten creditors in a class, but only 6 voted, 4 yes votes are required to pass the roll call votes (50% plus 1) and for the second count two thirds of the total owed those six vendors must vote yes.

“Voting on the plan is set to end on Aug. 21, 2017. In order for the Plan to be approved, at least one class must vote in favor of the plan.

“The confirmation hearing, set for September 7, 2017, will reveal the outcome of the vote. The judge may confirm the plan on that date.
“The voting and confirmation process marks the end of a lengthy and difficult process. There are a few noteworthy facts we are especially proud to share:

“There were no layoffs and there were no jobs lost during this process.

“No concessions were sought from employees.

“The facility did not apply for nor did it need any Debtor-in-Possession financing, meaning we did not need to borrow any money to fund the operation during the bankruptcy nor did we need to borrow money to pay the costs associated with bankruptcy. We were able to operate the facility and pay bankruptcy expenses with revenue generated out of the operations of the facility.

“Only one vendor chose to stop working with the medical center.

“Since the case was filed, all vendors are being paid on established terms and payments are current with all vendors.

“I must emphasize that a challenge this ominous is not overcome by only a few people. Every employee, every board member, local businesses and the entire community have played a part in getting us to this point.

“While exiting Chapter 11 ends the bankruptcy process, the true significance is that it provides a fresh start for the medical center and demonstrates an ongoing commitment to the community. With this fresh start we have an opportunity to demonstrate the facility can be fiscally viable.

“We look forward to serving the residents of Clinton County for years to come.”