Winston & Strawn LLP Represents Sound Point Agency LLC

Winston & Strawn LLP represents Sound Point Agency LLC, as administrative and collateral agent for the first lien secured lenders in the jointly administered chapter 11 cases of Path Medical LLC and Path Medical Center Holdings, Inc. pending in the Bankruptcy Court for the Southern District of Florida under Case No. 21-18338.   The debtors provide acute trauma treatment and diagnostic imaging services to patients throughout the state of Florida.

The Debtors’ chapter 11 cases were commenced on August 28, 2021.  As of the petition date, the lenders had a secured claim of no less than $75,000,000.  As part of the chapter 11 cases, the agent and lenders agreed to provide the Debtors’ with access to cash collateral on a consensual basis to help fund the chapter 11 process.

The Debtors, with the help of their investment banker SSG Capital Advisors, LLC, engaged in an extensive postpetition marking process to sell all or substantially all of the Debtors’ assets.  These efforts to identify a purchaser for the Debtors’ assets continued for months and were further prolonged by the ongoing COVID-19 pandemic and active litigation with State Farm, which litigation was ultimately settled at the end of May 2022. 

After almost a year in bankruptcy, in July 2022, the Debtors filed a motion to approve a sale of substantially all of the Debtors’ assets to a third-party purchaser pursuant to a private sale for an aggregate purchase price of $20,250,000.   In parallel, the Debtors pursued confirmation of a chapter 11 plan of liquidation to distribute the sale proceeds and wind-down the Debtors’ estates.  The sale and plan were subject to extensive negotiation by and between the Debtors’ key stakeholders, including the agent and the official committee of unsecured creditors.  These efforts culminated in the approval of the sale and confirmation of the chapter 11 plan by the Bankruptcy Court on July 15, 2022, at a fully consensual hearing.

The value-maximizing transaction embodied in the sale and plan will preserve nearly 300 jobs and provide for ongoing and uninterrupted care to the Debtors’ patients.  Moreover, the transaction will provide a material recovery to the lenders and general unsecured creditors that may not otherwise have been possible.  The transaction is a testament to the patience of the professionals and stakeholders involved and their commitment to maximize value for the benefit of all parties in interest.

The Debtors are represented by Brett D. Lieberman and Morgan B. Edelboim of Edelboim Lieberman Revah PLLC and Mark J. Wolfson of Foley & Lardner LLP.  The creditors’ committee is represented by  John B. Hutton III of Greenberg Traurig, P.A.  The Agent is represented by Gregory M. Gartland and Laura Krucks of Winston & Strawn LLP and Joshua W. Dobin of Meland Budwick, P.A.

Deal Team

Greg Gartland, Lead Partner, New York

Laura Krucks, Associate, Chicago