More than 200 people showed at the GVR West Center on Tuesday for an update from CEO John Matuska on Green Valley Hospital's financial health as it navigates the bankruptcy process. The hospital filed Chapter 11 bankruptcy in April.
A Debtor in Possession loan for $20 million has been approved and funded. It works like a bridge loan when an organization enters bankruptcy, providing a first lien on everything related, Matuska told the Green Valley News. If anything happens during the Chapter 11 bankruptcy process and assets must be liquidated, secured loans get paid first. If the organization survives financially and reorganizes, it would convert to permanent financing of secured debt, much like a mortgage.
No liens will be imposed after the DIP loan is paid off; the loan is secured by the properties. However, a new lender down the road may impose separate liens, Matuska said.
The hospital may be sold at some point, but he doesn't believe there are immediate plans to sell before the facility is in a much stronger financial position, he said in the interview.
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