Keeping a hospital open in a southern Arizona community required quick action, focused direction and strong cooperation in order to retain the confidence of the community and keep the doors open to patients.
Established in 1984 in Casa Grande, Ariz., Banner Casa Grande Medical Center is a full-service, non-profit, hospital that boasts 177 patient rooms and an impressive lineup of additional services, including a Wound Care Center with two hyperbaric oxygen chambers, sleep lab, outpatient physical therapy, full service laboratory and an urgent care center.
In February of 2014, it was announced that then named Casa Grande Regional Medical Center would file for Chapter 11 bankruptcy and that Banner Health, which owns and operates two dozen hospitals in seven states, would acquire Casa Grande Regional's assets and certain liabilities. The transaction involved the negotiation of the sale of the hospital’s assets to Banner Health pursuant to an Asset Purchase Agreement (APA) and related transactions. The APA implemented a Letter of Intent that was signed and announced by the two organizations on December 30, 2013, together with Banner’s agreement to provide interim funding for Casa Grande’s operations.
Rona Curphy, CEO and President of Banner Casa Grande Medical Center, knew her facility was distressed and that she needed to move quickly from finding a buyer to closing the sale. Her top concern was that the legal proceedings allow the center to keep the hospital doors open and maintain a high level of patient care. Working with the hospital’s financial advisors, she brought in Brownstein’s integrated team.
It took just 10 months for Brownstein to orchestrate the sale of assets out of Chapter 11 for Regional Care Services Corporation, the parent company of Casa Grande Regional Medical Center (and its related entities). Our team was able to close this sophisticated deal, complicated by not only the sale process and Asset Purchase Agreement but interim financing arrangements, reorganization under Chapter 11 and new health care regulations under the Affordable Care Act, through the cooperative multidisciplinary effort by attorneys with experience in multiple practices within the firm. The team was led by Mike King and Mike Pankow, along with Josh Hantman, Steve Abelman and Kinny Bagga who handled bankruptcy matters; Nancy Strelau, Bill Berger, Neil Goff, Andrew Elliot, Mike Chatwin, Tom Livingston, Nicole Adolphus, Tiffany Updegraff and Tenley Oldak who handled corporate matters; and Julie Sullivan, with support from John West and Kory Langhofer on the ground in Arizona, who handled health care regulatory matters.
“They all worked together seamlessly,” Curphy said. “At the time, I was not sure we could make it happen. There was great team work to get this done. The firm’s organization and understanding of companies kept us focused and he brought in the right players to make sure we hit our goal.”
The acquisition of Casa Grande by Banner Health comes after a hotly contested auction process coordinated by the Brownstein team, along with investment banking firm Hammond Hanlon Camp (H2C). As provided in the APA, Casa Grande filed for reorganization under Chapter 11 in the federal bankruptcy court. Brownstein’s representation encompassed all aspects of this sophisticated sale transaction, including the sale process and APA, interim financing arrangements, reorganization under Chapter 11, and all health care regulatory aspects of the foregoing. The Brownstein team was successful despite a number of hurdles including two other attempted transactions to acquire Casa Grande by other hospital systems, an auction process that ran right through Christmas Eve, significant antitrust challenges and extremely sophisticated health care regulatory issues throughout the process.