Northwest Suburban Community Hospital

Client

Northwest Suburban Community Hospital is a general acute-care hospital in the greater Chicago area. The hospital suffered substantial losses from 2003 through 2007, and filed for bankruptcy protection in July 2007.

Challenge

A Section 363 auction was held on September 27, 2007 to sell the assets of the hospital’s estate. The purchase price created value well in excess of the initial stalking horse bid, thus resulting in a much higher recovery to the secured creditors of the hospital’s non-debtor parent (via the Debtor’s secured guarantee of its parent’s debt). Bridge was engaged to assist the Company to address the issues relating to the Debtor’s prepetition intercompany transfers and certain other prepetition transactions with the Debtor’s prepetition secured creditors – with a particular focus on evaluating inter-company transactions between the Debtor and the Debtor’s related parties, as well the upstream parent debt guarantee.

Solution

Bridge put in place professionals with turnaround and forensic accounting experience to review the transfers in question and report to the Debtor.

Results

Bridge’s product provided the basis which allowed the parties to reach a settlement without further litigation.