Situation

Wadley Health System (“Wadley”), a 350-bed not-for-profit hospital located in Texas, experienced significant financial distress and a cash flow shortage, and was under pressure by their lender to restructure.

Summary of 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.