St. Michael’s Medical seeks approval for settlement agreement

By Sheri Kasprzak

New York, April 4 – St. Michael’s Medical Center, Inc. entered a motion seeking the approval of a global settlement agreement, according to a filing Monday with the U.S. Bankruptcy Court for the District of New Jersey.

The medical center is seeking court approval for its global settlement agreement with its committee of unsecured creditors and St. Michael’s parent company, Trinity Health Corp.

Among the settlement terms, St. Michael’s agrees to amend its budget to include reasonable costs of preparing and confirming a plan of liquidation and provide sufficient funding to effectuate an orderly wind down of its estates, including the payment of allowed priority and administrative expense claims to the debtors, Trinity and the committee with the costs and funding not to exceed $750,000 in the aggregate.

Additionally, the company’s DIP loan was increased to $15.75 million. As long as the DIP loan balance is less than $15.75 million, the company will have the right to draw from the facility an amount equal to the difference between the DIP loan balance and $15.75 million.

Also part of the agreement, Trinity will waive all of its claims arising from or related to any and all of the DIP obligations and all attendant liens and security interests.

A hearing on the settlement agreement is scheduled for April 26.

St. Michael’s, based in Newark, N.J., is a hospital operated by Trinity Health Corp. It filed for bankruptcy Aug. 10, 2015 under the Chapter 11 case number 15-24999.

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