LRGHealthcare receives further interim access to cash collateral

By Sarah Lizee

Olympia, Wash., Nov. 19 – LRGHealthcare received further interim access to the cash collateral of pre-bankruptcy lender KeyBank NA, according to a second interim order filed Thursday in the U.S. Bankruptcy Court for the District of New Hampshire.

The budget period will go from Nov. 20 through Jan. 2.

As previously reported, the company’s motion to use cash collateral drew an objection from region 1 U.S. trustee William K. Harrington, who said the terms would effectively “disarm the debtor of all weapons usable against [the lender] for the bankruptcy estate’s benefit and give the lender iron-clad defenses to all claims that might be asserted on the estate’s behalf.”

The U.S. trustee said the debtor should not request approval of provisions requiring the release of causes of action and defenses against the lender or prohibiting the use of the funds to challenge the lender or its claims.

“The lender should not be permitted to tie the court’s and the debtor’s hands, impairing their ability to protect not only creditors but members of the public in the event a surcharge under section 506(c) becomes necessary,” Harrington added.

LRGHealthcare is a Laconia, N.H.-based not-for-profit health care charitable trust operating Lakes Region General Hospital, Franklin Regional Hospital and several other affiliated medical practices and service programs. The company filed Chapter 11 bankruptcy on Oct. 19 under case number 20-10892.

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