|[March 05, 2014]
Five Connecticut HealthBridge Managed Health Care Centers Obtain Confirmation of Their Plan of Reorganization; Emerge From Bankruptcy Proceedings with Sustainable Cost Structure
DANBURY, Conn. --(Business Wire)--
Five Connecticut health care centers (Centers) managed by HealthBridge
Management LLC announced today that the U.S. Bankruptcy Court for the
District of New Jersey in Newark has agreed to confirm, with limited
modifications, the Centers' Chapter 11 Plan of Reorganization (the
This culminates a year-long process for the Centers to restructure their
labor costs and other obligations and ensure that the Centers could
obtain a competitive cost structure that would allow them to continue to
provide quality long-term nursing care for the elderly in Connecticut.
The Plan provides for the combination of concessions and a cash infusion
of approximately $67 million from affiliated entities, and was accepted
by the overwhelming majority of the Centers' creditors.
In agreeing to confirm the modified Plan, the Court overruled the
objection of The New England Health Care Employees Union, District 1199
(SEIU, District 1199) and the National Labor Relations Board, and paved
the way for the Centers to emerge from bankruptcy in the coming days. In
finding that the Plan was reasonable the Court noted, "the Plan proposes
a reasonable opportunity to reorganize Debtors' finances, pay creditors
a meaningful distribution and, importantly, in my view, continued
employment for 1,100 workers who care for the elderly and will receive
$175 milion in wages and benefits over the four years of the Plan."
"We are pleased that the Court has agreed to confirm our Chapter 11 Plan
with limited modifications clearing the way for us to officially exit
bankruptcy, hopefully by the end of this week," said HealthBridge
spokesman Ed Remillard. "We will exit bankruptcy having gained relief
from unsustainable and restrictive SEIU labor agreements that have
hamstrung the Centers' flexibility and competitiveness. Under the Plan,
the Centers will have a competitive and durable cost structure and the
Centers will be well-positioned to serve the needs of our patients,
maintain our 1,100 employees and compete successfully in Connecticut."
Under the Plan, the Centers' creditors are entitled to a recovery of up
to 75 percent on their claims and there will be no disruption in
operations or services. "Throughout this process, we have made the
continued high quality care of our residents our top priority, and we
are pleased that the Chapter 11 proceedings have had no adverse effect
on our patient care, relations with physicians or any other of the
Centers' normal operations," said Remillard. "The financial commitments
and undertakings that the Centers and their affiliates have made under
the Plan demonstrate that the continued excellent care and safety of the
Centers' residents remains paramount," he said.
The bankruptcy plan pertains only to the five unionized Connecticut
Centers and does not apply to the other health care centers managed by
HealthBridge Management, LLC. Each of the five centers is a sub-acute
and long-term nursing care facility for the elderly in Connecticut. The
facilities are: Long Ridge of Stamford, Newington Health Care Center,
Westport Health Care Center, West River Health Care Center, and Danbury
Health Care Center.
The Chapter 11 filing was made in U.S. Bankruptcy Court for the District
of New Jersey.
About the Centers
The five Centers provide long-term care and short-term rehabilitation
services. For long term care residents who have medical needs, the
Centers provide 24-hour-a-day nursing care, nutritional monitoring and
planning, medication management and personal care. For individuals in
need of nursing and/or rehabilitation services following a recent
hospitalization for orthopedic surgery, stroke, oncology care, cardiac
care, general surgery and other diagnoses, the Centers offer medical and
physical rehabilitation including physical, occupational and speech
therapy, rehabilitative nursing and physician directed rehabilitation
plans, IV therapy, wound care and other services.
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