Judge denies El Paso Children’s Hospital request to delay plan until January

There have been big developments in the El Paso Children’s Hospital bankruptcy case.
Judge H. Christopher Mott announced Thursday afternoon his decision on two requests by the hospitals at the center of the conflict.

First, Children’s had asked for an extension to present its plan to restructure. Usually, companies get four months to present that plan after they declare bankruptcy. Children’s wanted another four months — until January.

The judge denied their request, saying Children’s is running out of money and can’t afford to wait until January.

Children’s has until Sept. 15 to file a reorganization plan with the court, an action Children’s claims in a statement it is well positioned to complete.

“There’s a lot of vindication on UMC’s side,” said UMC CEO Jim Valenti. “Now we’re having a third party called a federal judge giving some strong statements in his remarks today, that gives us a lot of support.”

After the plan is filed – and if it’s accepted by the court — all of the creditors have until Nov. 16 to accept or reject the plan.

On the other hand, University Medical Center’s request for permission to present its plan for Children’s was denied, too.

After the ruling, El Paso Children’s Hospital CEO Mark Herbers issued the following statement.

“We want to thank the physicians who testified in support of EPCH as well as our employees who have remained steadfast as we have navigated through this bankruptcy process. Additionally, we are humbled by the support of our community and honored that they have entrusted us to care for the children of our region. EPCH is optimistic that we will be able to present a viable plan for reorganization in the coming weeks,” Herbers said in the statement. “Our priority always has been and will remain to maintain the highest level of quality care to our patients. Their well-being will most certainly be reflected in that plan.”

UMC released the following statement

“UMC’s motion to terminate exclusivity in hopes of filing its already-prepared plan, while denied at this time, gave UMC the opportunity to share details with the court. Major components of UMC’s plan were to ensure that EPCH’s unsecured creditors are paid by Dec. 31; to expedite the emergence from bankruptcy for EPCH; to begin the process of stabilizing the viability of EPCH; and to strengthen and enhance relationships between UMC, EPCH and the El Paso medical community.

“UMC asked Judge Mott to consider its motion to terminate “exclusivity” for EPCH in light of EPCH’s request to extend the time allowed for EPCH to file a plan.

“UMC’s plan was to ensure all of EPCH’s creditors receive payment in full from EPCH for debts owed. Further, should EPCH be unable to satisfy those claims for payment, UMC’s plan was to provide funding for EPCH’s creditors to ensure creditors are made whole.”

UMC President and CEO Jim Valenti said in the statement that, “We support Judge Mott’s decision and direction regarding the termination of exclusivity, and we have a solution ready and on the table that could potentially preserve EPCH’s viability. We look forward to reviewing EPCH’s plan if and when it is submitted to the court.”