NATURE OF ASSIGNMENT:
Primary: Company Services / Financial Advisor to Debtor
Primary Industry: Healthcare
Company: $85 million nursing home chain
Situation: A nursing home chain composed of 27 separate legal entities was beset with cash flow issues. Its lender was reducing availability under a revolving credit facility while operational issues were resulting in patient lawsuits.
Focus Scope: At the request of the senior lender, Focus was engaged to assess the likely feasibility of the turnaround plan that management had prepared, and – if necessary – to help the lender maximize its recovery via guiding the entities through the bankruptcy process.
Tasks Performed: Having established that an out of court restructuring would not be effective, the Focus team worked with management to prepare all aspects of pre-bankruptcy planning. We then developed all schedules and reporting mechanisms for the court, developed rolling weekly cash flow models, implemented reporting mechanisms for the lender, and provided expert testimony and financial planning advice to counsel. Operationally, Focus instigated the orderly closure of under-performing locations and improved cost efficiency via restructuring and outsourcing certain activities.
Results: Focus facilitated the filing for bankruptcy protection of the 27 legal entities in a timely manner. We have provided the lender with attainable budgets to enable the lender to establish a Debtor in Possession financing facility, to support ongoing operations while a buyer is identified through the 363b process.