Lower Bucks Hospital
Founded in 1954, LBH is a community hospital located in Bristol, Pennsylvania. The Hospital offers a full range of acute, sub-acute, ambulatory and related services including cardiac catheterization, open heart surgery, diagnostic imaging, industrial health, mental health, home health and orthopedics. LBH is licensed to operate 186 beds and maintains a 36-acre medical campus along with an ambulatory surgery center and a health & wellness center.
Starting in 2007, the Hospital experienced a decline in net patient service revenue due to a variety of factors. LBH sustained significant operating losses and, as a result, was forced to use a substantial amount of its working capital, including cash and investments, for capital expenditures, pension obligations and annual debt service. Unable to continue making the required principal payments on its secured debt, the Hospital and its subsidiaries filed for Chapter 11 in January 2010.
LBH engaged SSG in October 2009 to explore strategic alternatives including the sale of substantially all of the Hospital’s assets as a going concern, raising additional debt or restructuring the Hospital’s $25 million of secured debt and $35 million of underfunded pension obligations. After marketing the Hospital and receiving several indications of interest, LBH’s management and professionals began to explore the potential to issue new debt in the form of long term bonds collateralized by recurring cash flow from legislatively approved grants from Bucks County (the “County”) equal to one-half of the newly approved table gaming assessment received by the County from the nearby Parx Casino. That new debt would be used to fund a stand alone Plan which would allow the Hospital to remain a not for profit and independent community full acute care facility. LBH’s professionals negotiated with all stakeholders during the lengthy engagement, including the Pension Benefit Guaranty Corporation, the Indenture Trustee for the Bondholders and the Creditors’ Committee, culminating in a consensual Plan. The new $14 million bond offering through the Bucks County Redevelopment Authority, along with a new mortgage on the Hospital’s ambulatory surgery center and a portion of cash on hand were the sources of funding for the Plan which was confirmed in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania on December 15, 2011 and went effective on January 19, 2012.