Consulate Health gets confirmation of Chapter 11 plan of liquidation

By Sarah Lizee

Olympia, Wash., Dec. 3 – CMC II, LLC, which does business as Consulate Health Care, received confirmation of its Chapter 11 plan of liquidation, according to a minute entry filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company said the plan reflects a complex settlement reached after months of negotiations between the debtors, lender affiliate CPSTN Operations, LLC, and the official committee of unsecured creditors, among others.

Under the settlement, CPSTN will acquire substantially all of the debtors’ assets in exchange for a settlement consideration, which includes a credit bid of all $5 million owed under the debtor-in-possession facility, additional estate funding payments by CPSTN of $500,000, and the payment of some additional amounts over time on account of professional fees, among other things.

Administrative expense claims, priority tax claims and priority claims will be paid in full in cash.

Holders of other secured claims will be paid in full in cash or receive the collateral securing their claims.

The holder of the FCA claim will receive 73% of the remaining DIP funds and estate funding.

The holder of the relator expense claim will receive 24% of the remaining DIP funds and estate funding.

Holders of general unsecured claims will receive their pro rata share of 3% of the remaining DIP funds and estate funding and the other unsecured annual payment fund, which including three annual payments of $23,000, totaling $69,000, to be paid by CPSTN.

Equity interests will be canceled with no distribution.

Consulate Health Care is a Maitland, Fla., senior health care services provider. The company filed bankruptcy on March 1, 2021 under Chapter 11 case number 21-10461.

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