Bankruptcy and Financial Restructuring

Healthcare Update: Bad Times for Hospital in the Bayou State

2/7/2017| Article

Bankruptcy & Corporate Restructuring Bulletin

By Robert M. Schechter and Rachel A. Parisi

On January 30, 2017, Louisiana Medical Center and Heart Hospital, LLC, a 132-bed acute-care hospital located in the heart of St. Tammany Parish in Lacombe, Louisiana, filed for bankruptcy. As reported in papers filed with the bankruptcy court, Louisiana Medical failed in its effort to sell its hospital as a going concern prior to commencing its bankruptcy case and is now swiftly winding down its operations due to continuing losses. Louisiana Medical has outstanding secured and other demand note debt of over $110 million and its 20 largest non-insider unsecured creditors alone are owed in excess of $4.3 million. The value of Louisiana Medical's assets, while pegged at between $1 million - $10 million in the hospital's bankruptcy petition, is uncertain at this time. Louisiana Medical attributes its current financial challenges to falling admissions and net outpatient revenues paired with increasing salaries, wages and benefits.

On Sunday, February 5, matters took a turn for the worse for Louisiana Medical, as it was hit with a class action lawsuit alleging that the hospital failed to give employees 60 days' notice of mass layoffs required by the Worker Adjustment and Retraining Notification Act. The hospital's state of affairs now requires its creditors to act quickly and to be creative - in their efforts to extract any value that may be left in what is often referred to as a "melting ice cube" situation. As a strategy for better returns, creditors of this hospital and others should keep a close eye on the hospital's relationship with, and support from, government and the surrounding community. Indeed, it was this support (specifically, an increase in Medicaid reimbursement rates for the hospital as a result of coordinated private and legislative efforts) that allowed another Louisiana hospital, St. Francis Medical Center, to recently reach greater financial stability after years of unprofitability.[¹]

The earlier that a hospital and its creditors, employees and community identify a collective path for securing financial well-being aided by government support, the more likely that the parties will experience positive results and financial stability. Even in chapter 11, it is not too late to employ this approach to maximize returns and increase the likelihood of a beneficial outcome for all parties-in-interest. Louisiana Medical is a co-debtor with LMCHH PCP LLC in jointly administered bankruptcy cases pending in the United States Bankruptcy Court for the District of Delaware, Case Nos. 17-10201 and 17-10202.

¹ Hilburn, Greg. "State deal saves St. Francis for now." The News Star, Feb. 1, 2017.

Principal Warren J. Martin Jr. Featured in TMA's Journal of Corporate Renewal

7/19/2016| News

Porzio principal Warren J. Martin Jr. is featured in the article "Back on the Boardwalk," by Maura Sage, in the Spotlight section of the July/August 2016 issue of the Turnaround Management Association (TMA) Journal of Corporate Renewal

The article focused on the 2016 TMA Mid-Atlantic Regional Symposium, held June 8-9 in Atlantic City. Mr. Martin was a member of the lead panel, "The Future of Atlantic City," which explored the financial problems facing Atlantic City, as well as the strategies and prospects for a successful turnaround. The esteemed panel debated the benefits to the city of a Chapter 9 proceeding, versus those of a takeover by the state. 

TMA is an organization focusing on the business of financial restructuring, with a majority of members coming from non-legal circles. 

To read the Journal of Corporate Renewal article, please click here

More >

Chambers USA 2016 Recognizes Three Porzio Practice Groups and Five Porzio Attorneys

5/27/2016| News

Porzio, Bromberg & Newman P.C. is pleased to announce that the firm’s Bankruptcy/RestructuringEnvironmental and Litigation: Product Liability practices have been recognized by Chambers USA 2016 for excellence, and five firm attorneys have been recognized as leading lawyers in their respective practice areas in the prestigious directory of “America’s Leading Lawyers for Business.”

Porzio Ranked Attorneys:

The Chambers USA 2016 directory, published May 2016, is compiled based on thousands of interviews of lawyers and clients conducted by a team of 50+ full-time researchers to obtain a consistent market view of which firms and attorneys are considered leaders in their field. The qualities on which rankings are based include technical legal ability, professional conduct, client service, commercial awareness/astuteness, diligence, commitment, and other qualities most valued by clients.

For additional details about Chambers research methodology, please click here.

No aspect of this advertisement has been approved by the Supreme Court of New Jersey.

Porzio Promotes Two Attorneys to Principal and Two to Counsel

7/1/2016| News

Porzio, Bromberg & Newman P.C. (Porzio) is pleased to announce the promotions of John McKeague, Ph.D. and Brian P. Sharkey to principal, and of B. Dell Chism and Kelly D. Curtin to counsel. The promotions are effective July 1, 2016.                                                                                                                                                                                         

More >

Brett Moore Quoted by Law360 Regarding U.S. Supreme Court's Bankruptcy Fraud Ruling

5/17/2016| News

Porzio, Bromberg & Newman principal Brett S. Moore was quoted by Law360 in a report on the May 16, 2016 U.S. Supreme Court's decision in Husky International Electronics v. Daniel Lee Ritz Jr., in which the Court declined to establish a narrow interpretation of "actual fraud" in determining whether debts can be discharged through bankruptcy.

According to Moore: "The Supreme Court's decision in Husky ... is significant for a number of reasons. The court's interpretation of Section 523(a)(2)(A) to include fraudulent transfer schemes resolved a split amongst the circuits and thereby brings more uniformity regarding the types of debts that are dischargeable. Uniform interpretation of the Bankruptcy Code is generally a good thing and helps provide consistency to cases regardless of venue. Further, by applying a broad interpretation of 'actual fraud' that does not require any 'false representations,' the court may help lessen the likelihood that estate assets are inappropriately transferred."

Law360 is a subscription website. Subscribers can read more reactions to the ruling here.

More >

Porzio Congratulates Principal John S. Mairo on INSOL Global Fellowship

4/11/2016| News

Porzio, Bromberg & Newman, P.C. (Porzio) is proud to congratulate principal John S. Mairo on his new distinction as an INSOL International Fellow, following successful completion of the elite 2014-2015 INSOL Global Insolvency fellowship program.

INSOL International is a global alliance of associations for accountants and attorneys who specialize in bankruptcy and financial restructuring, comprised of a network of more than 40 associations world-wide and totaling over 10,000 professional members. INSOL also includes ancillary groups across legal, political, financial and academic sectors. All of these members have helped to shape INSOL's reputation as the world's foremost insolvency association. 

INSOL's goal is to foster leadership in international insolvency and credit-related issues and to develop effective mechanisms for dealing with cross-border issues. The Global Insolvency Practice Course focuses on the concepts of reorganization, bankruptcy and the various means by which financially-distressed international corporations can be addressed. Emphasis is also placed on how insolvency is regulated world-wide and the related legislation.

Participants who successfully complete the INSOL Global Insolvency program are bestowed the title of "INSOL Global Fellow," and are recognized for exceptional knowledge of the legal and financial factors that affect distressed businesses, and how to best address them in an international forum. Following a strict admittance review, this distinction is the result of months of rigorous research, writing and in-person testing, both in the US and abroad.

John S. Mairo is co-chair of Porzio's Bankruptcy and Financial Restructuring Department.  He concentrates his practice in the areas of bankruptcy, workouts, financial reorganizations and creditors’ rights. Mr. Mairo received the AV rating (highest rating) by his peers in the Martindale-Hubbell Law Directory and was recognized in Best Lawyers in America 2015 and Chambers USA 2014. He has been selected as a New Jersey Super Lawyers 2016 Top 100 attorney, a distinction bestowed only upon the fraction of attorneys who receive the highest point totals during Super Lawyers' extensive selection process.

More >

Warren Martin Quoted in 2016 New Jersey Super Lawyers Magazine

3/28/2016| News

Porzio principal Warren J. Martin Jr. was quoted in the 2016 New Jersey Super Lawyers Magazine April article "Doing, Working, Hustling: Michael Sirota went from delivering eggs to representing The Donald," by Patrick Pawling.

Mr. Martin is co-chair of Porzio's Financial Services and Bankruptcy Department. He practices in the areas of bankruptcy, workouts, financial reorganizations and creditors’ rights, and has been recognized on the New Jersey Super Lawyers list in 2005 - 2006 and 2008 - 2016.

To read the full article, please click here.

Nineteen Porzio Attorneys Recognized in Best Lawyers of America, 2016

8/17/2015| News

Porzio, Bromberg & Newman is pleased to announce that 19 firm attorneys, in 20 practice areas, were recently selected by their peers for inclusion in The Best Lawyers in America, 2016 edition.

Porzio Attorneys Recognized in The Best Lawyers in America, 2016:

Principals

  • Timothy L. Barnes - Medical Malpractice Law - Plaintiffs; Personal Injury Litigation - Plaintiffs
  • Steven P. Benenson - Commercial Litigation; Mass Tort Litigation / Class Actions - Defendants
  • Roy Alan Cohen - Mass Tort Litigation / Class Actions - Defendants; Product Liability Litigation - Defendants
  • Vito A. Gagliardi, Jr. - Education Law; Litigation - Labor & Employment
  • Douglas R. Henshaw - Land Use & Zoning Law; Real Estate Law
  • William A. Krais - Medical Malpractice Law - Plaintiffs; Personal Injury Litigation - Plaintiffs; 
  • John S. Mairo - Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law; Litigation - Bankruptcy
  • Warren J. Martin Jr. - Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law; Litigation – Bankruptcy
  • Stephen C. Matthews - Product Liability Litigation - Defendants
  • Brett S. Moore - Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law
  • Michael L. Rich - Commercial Litigation; Litigation - Labor and Employment; Litigation - Real Estate
  • Robert G. Shepherd - Litigation - Intellectual Property
  • Thomas Spiesman - Environmental Law
  • Charles J. Stoia  - Commercial Litigation
  • Peter J. Wolfson - Land Use & Zoning Law; Litigation - Real Estate; Real Estate Law

No aspect of this advertisement has been approved by the Supreme Court of New Jersey.

More >

Porzio Principal John S. Mairo Selected to the 2016 New Jersey Super Lawyers Top 100

3/30/2016| News

Porzio, Bromberg & Newman proudly congratulates principal John S. Mairo on his selection to the New Jersey Super Lawyers 2016 Top 100 list.

John concentrates his practice in the areas of commercial litigation, workouts, financial reorganizations and creditors’ rights. He is certified in Business Bankruptcy Law by the American Board Of Certification and received the highest rating by his peers in the Martindale-Hubbell Law Directory.  In addition, John successfully completed the INSOL Global Insolvency Practice Course and is recognized as an INSOL International Fellow. He was named to the New Jersey Super Lawyers Rising Stars list in 2009, and has been recognized on the New Jersey Super Lawyers list annually since 2010.

The selections for this esteemed list are made by the research team at Super Lawyers. Each year, the research team undertakes a rigorous multi-phase selection process that includes a statewide survey of lawyers, independent evaluation of candidates by the attorney-led research staff, a peer review of candidates by practice area and a good-standing and disciplinary check.

To view the complete list and to learn more about Super Lawyers and the selection process, please click here.

No aspect of this advertisement has been approved by the Supreme Court of New Jersey.

Mairo, John

Congratulations to 15 Porzio Attorneys Selected for Inclusion in 2016 New Jersey Super Lawyers

3/11/2016| News

Porzio, Bromberg & Newman P.C. is pleased to announce that 15 firm attorneys have been recognized by New Jersey Super Lawyers 2016 and 5 firm attorneys have been recognized by New Jersey Super Lawyers - Rising Stars 2016.

Each year, no more than 5 percent of the lawyers in the state receive this honor. The lists appear in the April 2016 issue of New Jersey Monthly magazine, New Jersey Super Lawyers 2016 magazine and on SuperLawyers.com.

More >