December 15, 2021 – The Court hearing the MTPC cases has extended the periods during which the Debtors have an exclusive right to file a Chapter 11 Plan, and solicit acceptances thereof, through and including January 21, 2021 and April 22, 2022, respectively [Docket No. 925]. Absent the requested relief, the Plan filing and solicitation periods are scheduled to expire on December 21, 2021 and March 22, 2022, respectively.
In the period since their November 19th requesting motion, the Debtors have indeed made long-awaited progress in their "complex" sale process; with auctions held on November 30th and December 1st seemingly yielding a purchaser for each of the Debtors' three proton therapy and cancer treatment centers, each of which was sold separately (Provision Trust buying two of the three).
With the Debtors' sale hearing set for December 15th, we shall soon know whether the Debtors will finally be able to transition from sale efforts to the negotiation/drafting of a consensual Plan. The Debtors did receive a limited objection to the proposed sales from the creditors' committtee with that objection [Docket No. 919] concerned that their may be some question as to whether Provision Trust has been able to source the funding necessary to to close its insider purchases of the Debtors' MTPC and PCPT Hamlin centers (see structure chart below for existing Provision Trust ownership levels).
Adding to a general sense of nervousness, the Debtors have yet to file either of the already overdue Provision Trust APAs with Provision Trust President Terry Douglass commenting as to the state of financing efforts in respect of MTPC (with substantially identical language as to PCPT Hamlin) [Docket Nos. and 926 and 927, respectively]: "For months Provision Trust has worked to secure necessary funding to close the Sale Transaction, including payment of the Cure Amounts for the assumed and assigned contracts. Representatives of Provision Trust have sought both debt and equity financing….Provision Trust will continue to pursue funding sources and is optimistic, based on its efforts to date and continued best efforts, that it will secure the funds to acquire the Assets by the Closing Date or sooner."
Noting that their "Sale Process has proven to be complex because of the relationship between each of the Debtors and their vendors and their equipment manufacturer," the Debtors argue that the proposed exclusivity extension is warranted because they need more time to complete that process before the terms of a Plan can be negotiated.
The Debtors' extension motion [Docket No. 854] explains, “On August 27, 2021, the Court entered an order approving bid procedures for the sale of substantially all of the Debtors’ assets. The Debtors are working with Houlihan Lokey Capital, Inc. (‘Houlihan’), the Debtors’ investment banker, the Committee and the bond trustee of each of the Debtors’ respective prepetition bonds (the ‘Bond Trustee’) to conclude the sale process (the ‘Sale Process’) that they have initiated and the Court has approved.
The Debtors have extended the sale timeline several times to work with bidders. Since the last extension of the sale process milestones, the Debtors have been in communication with bidders regarding the features of their offers, approaches to value, and any contingencies to implementation of their transactions. To that end, the Debtors filed the Notice of Stalking Horse Bidder for Knoxville Proton Therapy Center [Dkt. No. 833] (the ‘Notice of Knoxville APA’) on November 13, 2021, selecting Covenant Health as the designated Stalking Horse Bidder (as defined in the Bid Procedures Order) for the PCPTK proton therapy center located in Knoxville, Tennessee. Attached as Exhibit A to the Notice of Knoxville APA is a copy of the stalking horse purchase agreement with Covenant Health.
The Debtors and their professionals need additional time to work towards value maximizing outcomes, including potentially conducting an auction. Accordingly, the Debtors seek to extend the Exclusivity Periods (as defined below) to allow them to continue and conclude the Sale Process and prepare, solicit and confirm a chapter 11 plan… The Sale Process will serve as the foundation for negotiating a plan with the Debtors’ stakeholders. The Sale Process has proven to be complex because of the relationship between each of the Debtors and their vendors and their equipment manufacturer. This has required the Debtors, Houlihan, the Bond Trustee, and the Committee to navigate a number of issues to ensure that the Sale Process provides the highest and best value for the Debtors and their estates.
Second, the Debtors’ purpose in seeking extension of the Exclusivity Periods is a good-faith effort to conclude the plan process without the distraction and costs of a competing plan process. Any competing plan would serve as a distraction and deplete the Debtors’ limited resources and time. Put differently, the relief requested in the Motion is not intended for the purpose of coercing or strong-arming any creditor, but rather to benefit the Debtors’ stakeholders as a whole. Third, this Motion only requests a short extension, and the Debtors have been working diligently since the Petition Date to make progress toward a sale and plan, including filing a motion to approve bid procedures, having those procedures approved and soliciting and receiving bids from interested parties pursuant to the approved procedures.”
About the Debtors
According to the Andrews Declaration: “The Debtors are non-profit companies, two are operating individually as full-service proton therapy and cancer-treatment centers, and one is being developed as the same. As non-profit companies, the Debtors are devoted to the health and well-being of their regional communities by providing exceptional care to their patients. The Debtors have provided, collectively, more than 100,000 treatments since they opened their doors.
Each Debtor is a limited liability company. Two operate full-service proton therapy and cancer-treatment centers, and one is developing a full-service proton-therapy and cancer-treatment center. MTPC operates the facility in Nashville, Tennessee. PCPTK operates the facility in Knoxville, Tennessee, and PCPT Hamlin is developing the facility in Winter Park (Hamlin), Florida. The Debtors operate vertically-integrated companies in cancer care with connections between the cancer-care provider, systems and technology, operator, and developer (noting that the facility operated by PCPTK utilizes a treatment system from a third party, IBA).
PCPTK was the first proton therapy cancer treatment center in Tennessee, second in the Southeast, and 13th in the nation. Building on the success of the PCPTK, MTPC established a proton therapy cancer treatment center in Nashville in 2018. PCPT Hamlin has been constructing a proton therapy center in the Hamlin community, just outside of Orlando, Florida, since December, 2018.”
As to what proton therapy actually is, the Declaration continues: “The Debtors employ a next-generation proton-therapy system using external beam radiotherapy along with innovative healthcare solutions focused on improving patient care and clinical outcomes for cancer patients. Conventional x-ray therapy deposits energy along the entire path of the beam when entering and exiting the tumor site, which damages healthy organs and tissues of a patient. The proton therapy provided by the Debtors is non-invasive treatment that precisely targets cancerous and non-cancerous tumors and reduces the risk of side effects to surrounding healthy tissue. 19.The Debtors use the most precise form of proton therapy, called ‘Pencil Beam Scanning,’ which allows physicians to target the tumor area with the highest radiation dose by a proton beam only millimeters wide, thus controlling both the depth and the position of the beam, and planning the exact point at which the proton beam stops inside the body. This allows doctors to spare healthy organs and bodily tissue from unnecessary radiation exposure while treating tumors and diseased tissue. This approach has been shown to improve the quality of life for patients both during and after treatment and may lead to reduced patient side effects, fewer patient treatments, improved local cancer control, and improved quality of life for the patient, and shorter treatment times.”
Corporate Structure Chart
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The post MTPC, LLC – Court Grants Sixth Extension of Exclusive Plan Filing Period As Debtors Look to Conclude “Complex” Sale Process and Stalking Horse Provision Trust Looks to Tie Up Financing Efforts appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.