Hunter
12/08/23
Attorneys for Mercy Iowa City have asked a bankruptcy judge to extend their deadline to compile a proposal to monetize remaining assets, compensate its creditors, liquidate and cease operation of the hospital.
The Gazette reports the hospital had 120 days to submit the Chapter 11 plan from August 7th, the day they made the decision to file for bankruptcy. On Tuesday, the deadline day, lawyers for Mercy asked a bankruptcy judge to extend their exclusive right to submit the plan to March 4th, and extend to May 6th the period where they can solicit votes and support for the plan. They said allowing a competing liquidation plan would, quote, “greatly complicate and increase the cost of administering the Chapter 11 cases.”
Mercy’s largest bondholder, Preston Hollow Community Capital, opposes the motion. They say they’re prepared to present their own Chapter 11 plan of liquidation and believe they have the endorsement and support of the thousands of past and present Mercy employees who are owed pensions.
Preston Hollow also argued that very little progress has been made by Mercy to formulate a Chapter 11 plan, and further delays will substantially reduce the amount creditors will be able to recover.
The judge gave no indication when a ruling on the request would be made.