A&M served as both the official unsecured creditors’ committee and as debtor’s advisor for UHMC.

Client Mandate
New York United Hospital Medical Center (“UHMC”) operated as a 224-bed, not-for-profit community healthcare provider, with a 70-bed skilled nursing unit. UHMC filed for Chapter 11 bankruptcy protection and then subsequently decided to cease operations and liquidate its assets. The Medical Center real estate assets consisted of a 15.7-acre site and 500,000 square feet of improvements including hospital and health care facilities and a twelve-story apartment building.

Numerous issues significantly impaired the marketability and value of the site, including uncertainty regarding rezoning (the land was zoned for two-family residential property use), political pressures; complexities relating to an antenna farm master lease arrangement and complications regarding the separate ownership structure of the apartment building that was financed by a government-sponsored debt instrument.

A&M’s Approach
Serving both the official unsecured creditors’ committee and as debtor’s advisor, an A&M REAS team began investigating issues surrounding the property. Given the large scale redevelopment potential of the property, an immediate sale was unlikely given the rezoning requirements.  A&M REAS estimated that it would be two years before all development issues were resolved and the property was ready for sale.

Constituents in UMHC’s bankruptcy accepted A&M’s recommendations and authorized it to manage and mitigate the issues that impeded achieving the property’s full site value potential.

Results
Working with debtor’s legal counsel, A&M arranged a meeting between the municipality planning committee and prospective buyers and persuaded the planning committee to provide a written report clarifying its position on future zoning and land uses. A&M facilitated meetings with key decision makers in the community to address political pressures surrounding the likely redevelopment of the hospital and an affordable housing apartment complex.

After securing creditor and Board approvals for a stalking horse contract at $22 million, three qualified bidders participated in an auction. The auction concluded with the bankruptcy court’s approval to sell the property to an investment fund managed by Starwood Capital for $28 million, a price which was 50 percent higher than initially anticipated.