December 12, 2019 – The Court hearing the Promise Healthcare Group cases has extended (for a
first, second, third, fourth, fifth time) the periods during which the Debtors have an exclusive right to file a Chapter 11 Plan, and solicit acceptances thereof, through and including February 29, 2020 and April 29, 2020, respectively [Docket No. 1647]. Absent the requested relief, the Plan filing and solicitation periods expire on November 15, 2019 and January 14, 2020, respectively.
Although the extension is for considerably shorter periods than those requested (May 5, 2020 and July 5, 2020, respectively), the Debtors are undoubtedly pleased to get anything at all; the gutsy request for almost six more months in respect of a fifth set of extensions, probably a negotiating strategy more than anything else. That said, it might be more properly viewed as a generous gesture (apparently declined) to save the Court some time and money by obviating the need for an inevitable sixth request pushing the Debtors out to the statutory maximum allowed as to Plan exclusivity. We will prepare to cut and paste our "sixth extension" story, as Debtors' counsel have largely cut and pasted their requesting motions, at some point in February 2020.
As we previously reported in respect of the Debtors' requesting motion [Docket No. 1586]: "One can almost hear the Debtors hold their breath in anticipation of the Court's response and one can only guess that the strategy here is to go long, allowing the Court to vent its frustration by curtailing the requested periods rather than reject them altogether. When part of a debtor's motion includes reminding the Court what the absolute statutory maximum is in terms of an extension motion ("Section 1121(d) provides that the Exclusive Filing Period 'may not be extended beyond a date that is 18 months after the [petition] date' and the Exclusive Solicitation Period 'may not be extended beyond a date that is 20 months after the [petition date]'.”), you know that something is not right, but the Debtors' do not provide more insight as to why they require more time "in order…to exhaust…all efforts to reach consensus."
We had previously reported incredulously in respect of the FOURTH extension, which premised its request on "scheduling conflicts" which had not allowed the Debtors, it appears, to even get a start on the Plan. We then wrote: "The rationale for the requested (and now granted) fourth extension is that the Debtors STILL have not had 'an opportunity to meet with the various stakeholders regarding the contents of a chapter 11 plan,' this in part due to 'scheduling conflicts.' The Debtors filed for bankruptcy more than 11 months ago promising an 'expeditious' prosecution of their Chapter 11 then…as they do now. The Debtors reported that their stakeholders were scheduled to meet on October 7th. In addition to the curious need to then have an additional 5 weeks to file a Plan, the Debtors exclusivity extension motion also suggests that their may exist real issues to be resolved with the Debtors' Official Committee of Unsecured Creditors."
The motion explains, “The Debtors have continued to facilitate discussions among the various stakeholders regarding the substance of a consensual plan of liquidation and will continue to do so. In order to give the Debtors more time to negotiate and document the terms of a consensual plan, or to exhaust all efforts to reach consensus, and avoid the significant disruption and value-destructive litigation surrounding competing plans, a further extension of the Exclusive Periods is warranted…Given that the final Sale closed on August 31, 2019, the Debtors need to quantify the potential administrative expense liability through the date of such final closing, the time period during which the bulk of any administrative expense liability is likely to have been incurred, in order to propose a confirmable plan of liquidation. An extension of the Exclusive Periods is necessary to allow the proposed second interim deadline to file administrative expense claims pass and to give the Debtors and their professionals sufficient time to reconcile such claims and commence the claims objection process.
The Debtors remain committed to filing and confirming a plan as soon as possible; however, the Debtors believe that, given the discussions that have occurred to date among the key stakeholders, the filing of any competing plans during the maximum statutory exclusive periods would destroy the value that the Debtors have generated through the Sales.”
Read more Bankruptcy News
The post Promise Healthcare Group – Debtors Who Had Promised “Expeditious” Chapter 11 Persuade Court to Issue Fifth Plan Exclusivity Extension appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.