Randolph Hospital statement OK’d; plan hearing slated for Aug. 25

By Sarah Lizee

Olympia, Wash., July 6 – Randolph Hospital, Inc., which does business as Randolph Health, received court approval of the disclosure statement for its Chapter 11 plan of liquidation, according to an order filed Friday with the U.S. Bankruptcy Court for the Middle District of North Carolina.

The plan confirmation hearing is scheduled for Aug. 25.

The plan distributes proceeds of the sale of Randolph’s assets to American Healthcare Systems, provides for the liquidation of the remaining assets through a liquidation trust, appoints an advisory committee to oversee the administration of the liquidation trust and be a representative of the debtors and the estates with respect to the D&O claims and other tort claims, and appoints a surviving officer of the debtors to administer the restricted assets and wind down the debtors.

Secured tax claims and priority non-tax claims will be paid in full.

Holders of secured term loan claims will receive the proceeds from the sale of the real property collateral securing the secured term loan claim in an amount equal to the value of the term lender’s interest in the real property collateral and the net proceeds of accounts from patient services rendered prior to the closing of the asset sale.

Holders of other secured claims will receive the proceeds from the asset sale in an amount equal to their interests in the collateral securing their claims, or the debtors will surrender the collateral securing the claims to the holders.

Holders of general unsecured claims will receive a pro rata share of net trust assets.

Holders of medical malpractice claims will be granted relief from the automatic stay and any stay or injunction provided for under the plan to pursue payment of their medical malpractice claims from applicable insurance policies. To the extent the claims are allowed, recovery will be limited to any available proceeds of the insurance policies. Holders will not receive any cash distribution from the liquidation trust or otherwise on account of their claims.

Randolph is an Asheboro, N.C.-based health care company. The company filed bankruptcy on March 6, 2020 under Chapter 11 case number 20-10247.

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