Brentwood, Tenn.-based Quorum Health has a path to exit bankruptcy after a Delaware judge approved the company's $1.3 billion restructuring plan June 29, according to Law360.
Quorum, a spinoff of Franklin, Tenn.-based Community Health Systems, filed for Chapter 11 bankruptcy in early April. The company said the bankruptcy filing is part of a plan to recapitalize the business and reduce its debt by about $500 million. The for-profit company asked the court to expedite approval of its restructuring plan.
Mudrick Capital Management, which owns roughly 15 percent of Quorum's shares, objected to the accelerated timeline in April. Mudrick argued Quorum's attempt to expedite its bankruptcy plan during the COVID-19 pandemic would prevent shareholders from thoroughly analyzing their treatment under the hospital operator's restructuring plan. Mudrick also argued that Quorum's lawyers obscured the amount of funding the company received under the Coronavirus Aid, Relief and Economic Security Act, according to Bloomberg Law.
On June 29, U.S. Bankruptcy Judge Karen Owens said she would approve the Chapter 11 restructuring plan and allow Quorum to hand over ownership of the company to creditors while slashing some of its debts, according to Bloomberg Law. The judge said Quorum's restructuring plan is "the best and only actionable proposal available" to allow the company to exit bankruptcy.
Quorum said it expects to exit bankruptcy in early July.