New LifeCare approved to enter $34.5 million stalking horse agreement

By Caroline Salls

Pittsburgh, July 30 – Hospital Acquisition LLC, which operates numerous New LifeCare and LifeCare medical facilities, received court approval to enter into a $34.5 million stalking horse bid agreement with PAM Squared, LLC, according to an order filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

The bid is comprised of a $29.5 million cash component and a $5 million subordinated promissory note.

The company said the note will be payable over four years with an interest rate of 5%.

If PAM Squared is not ultimately the high bidder, Hospital Acquisition will pay it a $200,000 break-up fee and reimburse up to $250,000 of its sale-related expenses.

As previously reported, an auction will be held on Aug. 6 if one or more qualified competing bids is received.

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

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