Astria Health

May 6, 2019

Astria Health, a large non-profit healthcare system based in Eastern Washington, has filed for bankruptcy along with a dozen or so affiliates. The company blames its chapter 11 filing on regulatory approval processes that stunted expansion plans, poor collections on accounts receivable, and charitable care that, despite best efforts, hadn’t been offset by charitable contributions. All of these issues have squashed cash flow and triggered issues with the debtors’ secured debt, part of which is uber-expensive. The debtors intend to use their DIP credit facility to take out their expensive “high cost of capital” MidCap Financial Trust-provided (and other) debt; they also hope to use the “breathing spell” provided by the automatic stay to remedy their collections problems and march towards a plan of reorganization within 150 days.

• Jurisdiction: E.D. of Washington (Judge Kurtz)

• Capital Structure: $72mm secured debt

• Professionals:

  • Legal: Dentons US LLP (Samuel Maziel) & (local) Bush Kornfeld LLP (James Day)

  • Claims Agent: KCC (*click on the link above for free docket access)

• Other Parties in Interest:

  • DIP Lender: JMB Financial Advisors

    • Legal: Arent Fox LLP (Robert Hirsh, Jordana Renert) & (local) Southwell & O’Rourke (Kevin O’Rourke)