Randolph Hospital gets confirmation of Chapter 11 plan of liquidation

By Sarah Lizee

Olympia, Wash., Aug. 26 – Randolph Hospital, Inc.’s, which does business as Randolph Health, Chapter 11 plan of liquidation was confirmed on Wednesday by the U.S. Bankruptcy Court for the Middle District of North Carolina, according to an order.

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.

The holder of the term loan claim will receive a cash payment of $8.45 million, the net cash proceeds, if any, of any accounts, which net cash proceeds will be paid to the holder on a rolling basis as those proceeds are received by the debtors or liquidation trust. The holder will also receive an allowed general unsecured claim in the amount of $200,000.

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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