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Hahnemann University Hospital gets approval of settlement with Drexel
By Sarah Lizee
Olympia, Wash., Aug. 26 – Center City Healthcare, LLC, which does business as Hahnemann University Hospital, received approval of a settlement with Drexel University, according to an order filed with the U.S. Bankruptcy Court for the District of Delaware.
The parties went through eight months of negotiations with judge Judith K. Fitzgerald and the official committee of unsecured creditors.
Hahnemann said the settlement resolves significant potential litigation and allow the debtors to focus on winding down their cases.
Since about two years before Hahnemann filed bankruptcy, the debtors and Drexel have been in ongoing disputes relating to an academic affiliation agreement.
Hahnemann said this relationship and the ongoing disputes forced it to devote significant funds and resources toward those issues, as opposed to the debtors’ businesses, and, since the filing of the Chapter 11 cases, their estates and creditors.
The key terms of the settlement include:
• The administrative claim request of about $3 million will be allowed in the amount of $1.49 million and payable on the date of the approval order becomes final and non-appealable;
• The unsecured claims of roughly $34 million will be allowed in the amount of $20 million and paid at the time of and in a manner consistent with the treatment of other allowed unsecured claims; and
• The parties will exchange mutual general releases of all claims excluding claims arising under the settlement term sheet.
Center City is a Philadelphia-based hospital operator. The company filed bankruptcy on June 30, 2019 under Chapter 11 case number 19-11466.
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