IM Foundation asks court to terminate Interfaith Medical's exclusivity

By Caroline Salls

Pittsburgh, Aug. 16 - IM Foundation, Inc. is seeking termination of Interfaith Medical Center, Inc.'s exclusive periods for filing and soliciting votes on a plan of reorganization so IMF can file a plan for the case, according to a Friday filing with the U.S. Bankruptcy Court for the Eastern District of New York.

Contrary to Interfaith's proclamation that there is no potential third-party transaction or stand-alone business restructuring plan in hand, IM Foundation said it hired health care workout and restructuring firm Alvarez & Marsal Healthcare Industry Group, LLC to analyze the medical center's operations, finances, potential partners alternative healthcare uses of the Interfaith property to continue as a health care facility and provider to the communities of Bedford Stuyvesant, Crown Heights and others.

IM said Alvarez & Marsal was also hired to assist the foundation in drafting a plan and proposal to the New York State Department of Health (DOH), the Dormitory Authority of the State of New York (Dasny) and the Interfaith Medical Center community.

The foundation said its draft plan includes a re-purposing plan, which retains behavioral health and crisis services while coordinating ambulatory with an ambulatory care partner; develops a leasing model for health care services, including a skilled nursing facility, physical rehabilitation, long-term acute care, health care education and other education; supports community primary care access; and transitions ambulatory care operations to a federally qualified health center which will assume grants, contracts and continue clinical and AIDS housing programs.

IM said it "is ready, willing and able to file the foundation reorganization plan with a disclosure statement and engage in the disclosure statement approval/plan confirmation process."

The foundation said its plan would "create a facility, which will provide vital health care to an underserved community and continued employment and support for the many people and businesses that depend on it for their health and livelihood."

As previously reported, Interfaith agreed to implement a closure plan in light of Dasny's refusal to consent to the medical center's use of cash collateral after July 29 unless it agreed to implement a closure plan, the DOH's rejection of a July 9 restructuring plan, DOH's direction to begin implementing a closure plan and Interfaith's lack of alternative funding.

Interfaith, a Brooklyn, N.Y., multi-site health-care system operator, filed for bankruptcy on Dec. 2, 2012. Its Chapter 11 case number is 12-48226.

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