Archives for: April 2007, 20
Bankruptcy Judge Makes Honest Comments on Proposed Sale in Ch 11
April 20th, 2007As you know buyers of companies frequently suggest that the target file a chapter 11 case so that the buyer can purchase "clean" assets. This process is not a foolproof method of purchase since the sale process in a bankruptcy includes open, public bidding. That is why there are often larger sized break up fees in a sale of assets out of a bankruptcy proceeding than in a private sale situation.
In the case of a Kentucky hospital, a Bankruptcy Judge recently commented on the fact that it appeared that the whole case was for the sole benefit of the potential buyer of the hospital's assets, the University of Kentucky.
"Bankruptcy Judge William S. Howard expressed concern yesterday that the Samaritan Hospital bankruptcy filing caters to the needs of the University of Kentucky while overlooking the unsecured creditors and other possible buyers for the hospital.
Samaritan's filings appear to be "designed to complete the transaction to UK with only a nod, if that, to to other potential buyers," Howard said. He later added that from the unsecured creditors' point of view, "the fox appears to be guarding the henhouse.""
Here is a link to the whole article:
http://www.Kentucky.com/179/story/47972.html
Mike
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