Cura Healthcare, Inc. highest bidder of Pineville Medical Center, LLC
Published 4:24 pm Thursday, August 8, 2019
A copy of the order confirming the winning bid component of the chapter seven trustee’s sale of the bankruptcy estate property involving Pineville Community Hospital Association was obtained by WRIL and made public Wednesday evening.
The order came down from the U.S. Bankruptcy Court for the Eastern District of Kentucky in London Wednesday and signed into effect by Gregory R. Schaaf Bankruptcy Judge. The statement reads that there was an order authorizing the sale and bidding procedures for the property and assets of the hospital on June 20.
The winning bid goes to Cura Healthcare, Inc. and its principal “Louis M. Volpini.” for $7,000,000.00, plus 5 percent buyer’s premium of $350,000.00, for a total sale price of $7,350,000.
As of the hearing date and time on the motion, the winning bidder Cura Healthcare Inc., had failed to make the 20 percent cash deposit in accordance with the sale order. The amount according to the sale order is $1,400,000, but they have until Aug. 16 to make good on the final settlement and payment of the total sales price, with credit for non-refundable deposits.
The statement continues that the auctioneer, Tranzon Asset Advisors, would sell the sale assets pursuant to a two round auction. The first round ran until July 15 and the second round of which ran on July 18 from 10 a.m. until 11 a.m. if the online second round method were used, or until the Trustee completed her one-on-one negotiations with the lead bidders.
The two bidding rounds were extended pursuant to the amended bid order until July 30 and Aug. 1, respectively. The Trustee elected to proceed with one-on-one discussions given the nature of the three bidders on Lot 1 for all assets and was the preference of the Trustee to sell all assets as opposed to individual bidders.
The Trustee, in her business judgment, requested that final bids and conditions be submitted to her by 4 p.m. on Aug. 1. A hearing on the Motion to Confirm was held on Monday in Lexington.
Of the $7,000,000 winning bid, half, which is $3,500,000 will be paid to the bankruptcy estate and used to pay $300,000 to the City of Pineville pursuant to the surcharge provided for in the July 21 order authorizing increased surcharge of $500,000 paid to the trustee. This includes “net cash proceeds” of the personal property with Pineville Medical Center, LLC (PMC), and the balance held and paid to secured creditors in the order of priority of their secured claims.
The other half, which is $3,500,000 will not be property of the Bankruptcy Estate but will be deposited into an escrow account solely designated for operating costs of the purchased hospital entity. This portion of the bid is to show the employees and the community that this Successful Bidder is committing its resources to the success of the hospital, rural healthcare clinic, and all services that the hospital has been providing or could provide.
WRIL contributed to information contained in this story.