Path Medical asks court to move plan confirmation hearing to June 30

By Sarah Lizee

Olympia, Wash., May 18 – Path Medical, LLC asked to move the hearing on confirmation of its Chapter 11 plan to June 30 from May 26, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Florida.

The company said that, despite the efforts of the debtors, secured and unsecured creditors, the official committee of unsecured creditors and the prospective asset purchaser, a fully negotiated sale contract hasn’t been executed yet. As such, the closing of the sale contemplated by the plan is not yet set.

The sale is a central component of the plan, the company said.

“While a sale could close post-confirmation, the debtors believe it prudent to seek a 35-day extension of confirmation at this time to formalize the terms of the sale,” the company said in the motion.

“Formalization of the sale terms would, among other things, further demonstrate the plan’s viability and buttress the support that creditor constituencies have expressed so far.”

The company also noted that some creditors have filed limited objections to the plan.

Path said the 35-day continuation will allow it to resolve those objections.

As previously reported, creditors were given until May 19 to submit votes on the plan.

According to the company’s amended disclosure statement, a liquidating trust will be created for the purpose of funding distributions under the plan.

General administrative expense claims and priority tax claims will be paid in full.

Lender claims will be paid from the net proceeds of a sale, after payment of general administrative expenses, professional administrative expenses, priority tax claims, priority claims, cure claims and the general unsecured claims cash pool. Any portion of the lender claims not satisfied by a sale will be treated as a general unsecured claim.

Holders of other secured claims will receive payment in full in cash, delivery of the collateral securing their claims, or other treatment leaving them unimpaired.

Other priority claims will be paid in full in cash.

Holders of general unsecured claims will receive their pro rata share of a $150,000 cash pool, and a beneficial interest in the liquidation trust, which will entitle holders to their pro rata share of litigation proceeds and liquidating trust assets.

Holders of convenience class claims will receive payment in full after the later of two weeks after the effective date and the date the claims become allowed.

Intercompany claims and equity interests will be canceled with no distribution to holders.

The Fort Lauderdale, Fla.-based company provides acute trauma treatment and diagnostic imaging services to medical patients. The company filed bankruptcy on Aug. 28, 2021 under Chapter 11 case number 21-18338.

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