New LifeCare Chapter 11 plan of liquidation effective as of Jan. 29

By Sarah Lizee

Olympia, Wash., Jan. 29 – Hospital Acquisition LLC’s, which operates numerous New LifeCare and LifeCare medical facilities, Chapter 11 plan of liquidation took effect on Friday, according to a notice filed with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company’s plan of liquidation was confirmed on Jan. 15, 2020. The plan originally was required to take effect within 90 days of confirmation, but the deadline was later extended.

The plan calls for the liquidation of the company’s remaining assets and the distribution of proceeds to holders of allowed claims.

Under the plan, priority non-tax claims will be paid in full in cash.

Other secured claims will be paid in full in cash, or holders will receive the collateral securing the claim.

Holders of pre-bankruptcy priming term loan claims will receive a share of distribution proceeds until the claims are paid in full.

Holders of pre-bankruptcy second term facility claims will receive a share of distribution proceeds following payment in full of the priming term loan claims until the claims are paid in full.

Holders of general unsecured claims, interests and intercompany claims will receive no distribution.

LifeCare, a Plano, Tex.-based health care consulting and management services company, filed for bankruptcy on May 6, 2019. The Chapter 11 case number is 19-10998.

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