Boston, MA. Nixon Peabody’s representation of Lawrence & Memorial Corporation (L+M) on the Connecticut-based, nonprofit health care system’s acquisition of the assets of Rhode Island’s The Westerly Hospital and certain affiliated companies has been recognized as the “Healthcare/Life Sciences Deal of the Year” by The M&A Advisor. We are honored to have had this unique opportunity to collaborate with our client L+M to help achieve its business goals and expand its ability to serve the residents of Eastern Connecticut and Western Rhode Island.
Cross-border hospital acquisition deals are unusual and present special challenges going beyond those of a typical M&A transaction. In addition to the customary creditors’ rights issues, this transaction posed a multitude of unique issues such as: the scope of jurisdiction of a state Mastership insolvency proceeding, health care antitrust clearances, a series of state-specific issues (such as Rhode Island Department of Health and Attorney General regulatory approvals and coordination with Connecticut authorities), charitable funds and tax-exempt organization rules, defeasance of tax-exempt bonds and securing alternative financing, Medicare and Medicaid requirements, and union negotiations. Furthermore, as a pre-condition to closing, potential liabilities for an underfunded defined benefit plan had to be resolved with the Pension Benefit Guaranty Corporation and compliance issues discovered during due diligence had to be settled with the Centers for Medicare and Medicaid Services, The Office of Inspector General of the Department of Health and Human Services and the Department of Justice. Throughout the course of the transaction, media, community, employee and medical staff relations challenges also had to be handled efficiently and effectively. L+M achieved turnaround success and restored hospital operations to “black” by the close of the first quarter post-closing.
“The award winners represent the best of the distressed investing and reorganization industry in 2013 and earned these honors by standing out in a group of very impressive candidates,” said David Fergusson, president of The M&A Advisor. The awards will be presented at The M&A Advisor Awards Gala on March 11, 2014.
The Nixon Peabody legal team was led by two Boston partners: Carolyn Jacoby Gabbay (Health Services) and Victor G. Milione (leader of the firm’s Financial Restructuring & Bankruptcy practice).