Wadley Health System

Situation

  • Engaged by a 350-bed not-for-profit hospital in financial crisis
  • Hospital out of cash and fighting to keep its doors open
  • Lender pressuring hospital to restructure or close

Execution and Results

  • Mark Toney and his team developed a 13-week cash flow forecast, provided management oversight of cash, and built a cash cushion to provide capital during the restructuring period
  • When both the Chief Financial Officer and Controller resigned, Mark ensured that their responsibilities were met
  • Mark, working closely with Debtor’s counsel, took a key role in the restructuring and Section 363 sales efforts, including negotiating a forbearance agreement with the primary secured lender that included a moratorium on bond payments to provide for additional time to find a buyer and complete the reorganization. He also worked with Debtor’s counsel to prepare for the bankruptcy filing and in conducting an auction process
  • Led the organization in a detail contingency plan (closure). The plan included patient care, asset protection, government supervision, labor relations and public and community communications
  • Assisted the Company with all cash management and reporting, schedule preparation, and monthly operating report preparation during the bankruptcy process
  • Provided compensation and benefit consulting services, including managing the wind down of employee benefit plans and the frozen pension plan to avoid significant employee and Pension Benefit Guaranty Corporation exposure for the Debtor
  • Achieved a Sale price for the hospital that was much higher than anticipated
  • The hospital was able to remain open to serve the community, 750 jobs were saved, the secured creditors were protected and the unsecured creditors received a partial recovery that they did not expect at the time of the bankruptcy filing

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