Thomas Health System reorganization plan confirmed by bankruptcy court

By Caroline Salls

Pittsburgh, Aug. 19 – Thomas Health System, Inc.’s plan of reorganization was confirmed Wednesday by the U.S. Bankruptcy Court for the Southern District of West Virginia.

According to the disclosure statement the plan “essentially implements a comprehensive settlement and compromise of the debtors’ obligations associated with their senior secured indebtedness, the series 2008 bond claims.”

The company said the settlement includes the bond trustee’s agreement to support the Thomas Health debtors’ use of cash to pay administrative, professional fee, priority tax and other priority claims, as well as to provide liquidity for the debtors’ continued business.

Under the plan, the 2008 bond trustee will receive $47 million in cash, as well as deficiency claims that will be treated as general unsecured claims and indenture funds.

Other secured claims will be either paid in full in cash, holders will receive the collateral securing the claims or the company will resume payments under pre-existing contracts or security agreements.

Each holder of a convenience claim will receive the lesser of $500 and the actual amount of its claim, with the total amount earmarked for these claims to be capped at $50,000.

Holders of general unsecured claims will receive a share of $750,000 in cash.

Thomas Health is a South Charleston, W.Va.-based health care provider. It filed bankruptcy on Jan. 10, 2020 under Chapter 11 case number 20-20007.

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