About The Study

Industry: Healthcare

Services:
  • Management Services
    • Crisis
    • Interim
    • Operations
    • Strategic

Situation

The health system’s financial management did not adapt to the institution’s growth. The medical system first went into bankruptcy in 2005, only to emerge in 2007 saddled with debt that would ultimately force the entity back into bankruptcy protection.  Since January 27, 2010, ToneyKorf has led one of the largest and most complex Chapter 11 bankruptcies in the healthcare industry. Engaged to guide the historic Saint Vincents Catholic Medical Centers of New York (SVCMC) through its restructuring and subsequent Chapter 11 bankruptcy, Mark Toney was installed as Chief Restructuring Officer and Steven Korf as Chief Financial Officer. Given the important mission that SVCMC served for the West Side of Manhattan and the greater New York community, and the complicated bankruptcy proceedings necessitated by the institution’s multifaceted collection of services, the engagement is a model of cohesive strategy and demonstrates the importance of balancing the complexity of the bankruptcy and the asset structure; compassion toward the patients, staff and doctors, and the community; and effectively obtaining cooperation among the involved constituent groups.

Summary of Execution and Results

  • Led communications with all key constituents: Unions, physicians, elected and state officials, press, etc.
  • Quickly identified and contained cash burn to allow for orderly disposition of assets
  • Directed the efforts to find a new sponsor to keep the hospital open. When unable to find a new sponsor, we proceeded with the orderly and safe closure of the hospital
  • Prepared a closure plan for the hospital and with the assistance of the medical staff safely discharged all patients
  • Evaluated the specific factors affecting the businesses, focusing on state and city health regulations, regulatory approval hurdles, patient transition requirements and key targets given the regulatory and business environment
  • Prepared an extensive plan for maintaining continued patient care and safety during the divestiture process
  • Negotiated significant improvement over stalking horse bids, including higher prices, assumption of major liabilities, and continued employment for thousands of employees
  • Achieved advantageous deal structures/combinations to maximize asset value and minimize risks with sensitive business lines
  • Managed a wide array of human resource issues, including negotiating wage concessions, managing the headcount reduction process, terminating the defined benefit pension plan and the wind down of employee benefit plans to avoid or reduce significant exposures to various employee-related claims
  • Negotiated agreements to store more than 300,000 cubic feet of patient medical records along with electronic patient health information for the legally required time periods to ensure access for patients for years to come
  • Managed the sale of key real estate generating more than $260 million in proceeds
TKP is unique among consultants: excellent personal service and very invested in the client. They do not consider themselves consultants, but rather part of the entity with which they are working.
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