43° P/CLOUDY, BREAKING NEWS
Palm Drive bankruptcy exit confirmed
Last Modified: Friday, June 12, 2009 at 5:12 p.m.
SEBASTOPOL, June 12, 2009 – Palm Drive's plan to exit Chapter 9 bankruptcy, originally filed in April 2007, was confirmed today by the Northern District of California Santa Rosa Division of U.S. Bankruptcy Court.
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The settlement proposed at the beginning of March and amended April 30 required review by the court and creditors before final approval. The ruling was made upon the approval of all 156 hospital creditors. The plan involves the sale of $10 million to $12 million in certificates of participation to repay $3.2 million owed to vendors at about 75 cents per dollar owed to creditors in debt for less than $10,000 and 55 cents per dollar to those owed more than $10,000. The sale will also go toward paying off a $3 million bridge loan from late last year as well as capital improvements.
If there are no appeals, the ruling will be final on June 22.
UnitedHealth Group has been identified as a potential purchaser of the certificates. The same group has proposed the purchase of bonds from the North Sonoma County Hospital District in Healdsburg and the Sonoma Valley Health Care District.
The end of the two-year bankruptcy followed a turnaround by the 37-bed hospital, including site improvements and a return to profitability.
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