Two recent decisions involving health care companies demonstrate how reorganization under chapter 11 of the Bankruptcy Code[1] can be used to manage large liabilities.
Sites Committee
Committees
The lifeblood for many hospitals is the prompt reimbursement by Medicare and Medicaid programs for services provided; this is particularly true for nonprofit providers.[1] As a result, the ability to compel reimbursement payments from the Centers for Medicare and Medicaid Services (CMS) or local and state Medicaid providers through the
![Photo of David C. Johnson[1]](https://abi-org-corp.s3.amazonaws.com/committee/Authors/djohnson.jpg)
The COVID-19 pandemic is straining already-troubled hospitals and other health care providers. Many will seek refuge in chapter 11, and bankruptcy courts nationwide will be called upon to adjudicate a host of issues, many time-sensitive, as health care providers struggle to provide services. Disputes regarding transferability of critical Medicare provider agreements are inevitable.
![Photo of Linda W. Knight [1]](https://abi-org-corp.s3.amazonaws.com/committee/Authors/LWK_0.png)
As most bankruptcy practitioners know, Congress adopted the Small Business Reorganization Act of 2019 (SBRA) in August 2019.[2] It took effect on Feb. 19, 2020, and is codified as subchapter V of chapter 11, title 11, U.S. Code, 11 U.S.C. §§ 1181-1195.
As the pace of chapter 11 cases quickens and the time frames within which theyare filed, administered and closed become condensed, so too do the issues that may arise with accelerated asset sales under § 363 of the Bankruptcy Code.
Thirty-three states and the District of Columbia permit some form of marijuana sales, and 11 states and the District of Columbia have enacted laws for the recreational sale and use of marijuana. Yet marijuana remains a “Schedule I” drug under the Controlled Substances Act,[1] equivalent to heroin under federal law.
If the ruling on the field stands, consumer credit contracts are ineligible for sale free and clear of consumer claims and defenses through a chapter 11 plan. Hon. James L. Garrity, Jr.
