Promise Healthcare Group – Cancels Auction and Designates Stalking Horse L.A. Downtown Medical Center as Successful Bidder with $84.2mn Bid

January 14, 2019 – Promise Healthcare Group notified the Court [Docket No. 478] that pursuant to Court approved bidding procedures [Docket No. 257] it had (i) cancelled a January 17, 2019 auction for substantially all of the Debtors’ Silver Lake Medical Center assets because it did not receive any qualified bids prior to the January 11, 2019 bid deadline other than that submitted by L.A. Downtown Medical Center LLC (the ‘Stalking Horse Bidder’) and (ii) designated L.A. Downtown Medical Center as the successful bidder. 

As previously reported in the motion seeking approval of the sale of substantially all of the Silver Lake Medical Center assets [Docket No. 37], “The goal of the Silver Lake Debtors’ Chapter 11 cases is to effectuate a transfer of their ongoing business in a manner that allows them to maximize value and resolve claims in an equitable and efficient manner….Following the Silver Lake Debtors’ and MTS’s extensive marketing efforts, which are detailed in the Sale Declaration, on October 24, 2018, the Silver Lake Debtors executed an agreement (the  ‘Stalking Horse APA’) with L.A. Downtown Medical Center LLC (the ‘Stalking Horse Bidder’) for the sale, transfer, and assignment of the Purchased Assets…the Stalking Horse APA contemplates aggregate cash consideration of up to $84,150,000, subject to certain adjustments as set forth therein (the ‘Purchase Price’) for the Purchased Assets, as well as the assumption of certain specified liabilities, and reflects the Stalking Horse Bidder’s agreement to act as a stalking horse bidder in a Court-supervised bidding and auction process. As required by the Stalking Horse APA, the Bidding Procedures contemplate a postpetition marketing process culminating in a closing of a transaction by no later than the ninetieth day after the Petition Date (defined below). The Closing Date may be extended under certain circumstances pursuant to the Stalking Horse APA, but in no event may the Closing Date be later than March 16, 2019. Speed is critical here because of the Silver Lake Debtors’ limited liquidity.”