New York, NY. Nixon Peabody’s representation of St. Francis Hospital, a general medical and surgical hospital in Poughkeepsie, New York, in the sale of its assets to Westchester Medical Center, has been recognized as the “Restructuring Deal of the Year” for transactions between $10–$100 million by the M&A Advisor.
David Fergusson, co-CEO and president of the M&A Advisor, said, “From lower middle market to multi-billion dollar deals, we are recognizing the leading transactions, firms and individuals that represent the highest levels of performance.”
In 2013, St. Francis faced imminent closure due to low margins, billing system malfunctions, and other operational and management problems On December 17, 2013, St. Francis filed for Chapter 11 protection with more than $50 million in debt. HealthQuest, a major hospital system in the immediate area, proposed to purchase the assets of St. Francis and maintain some services at the St. Francis facility. As part of the sales and marketing process implemented by the Bankruptcy Court, Westchester Medical submitted a higher and better offer. In May 2014, St. Francis and Westchester Medical consummated the sale. As a result of the sale, St. Francis, now known as MidHudson Regional Hospital of Westchester Medical Center, was able to retain most of its employees and keep all of its key clinical series intact, including the inpatient psychiatric beds and emergency mental health services, chemical dependency and detox services, and Level II trauma services. In addition, Westchester Medical has pledged to eventually expand its services in this historically underserved community. As a result of this transaction, St. Francis’s bondholders received a recovery of over 90% and its general unsecured creditors will likely receive notable distributions.
The Nixon Peabody legal team was led by Health Care team member Peter Millock and Bankruptcy & Financial Restructuring team members Daniel Sklar and Christopher Desiderio.