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Contact Info

Counsel for the Post-Effective Date Committee
Jeff Kandel
310.277.6910

Financial Advisors to the Committee: Alvarez & Marsal Healthcare Industry Group
Ron Winters, Ethan Norris

Valley Health System

This site has been created to provide unsecured creditors with information about Valley Health System's pending chapter 9 bankruptcy case and to solicit and receive comments

Distribution Update: Substantial Distribution to Creditors Made by Disbursing Agent

On Friday, February 7, 2014, Alvarez & Marsal Healthcare Industry Group, the disbursing agent appointed under the Valley Health System plan of adjustment, distributed over $5 million to the general unsecured creditors of Valley Health System’s chapter 9 bankruptcy case, representing payment of approximately 37% of each such creditor’s claim. (Additional funds are being held in reserve pending, among other things, (1) receipt of W-9 forms from creditors who have not yet submitted sent them and (2) resolution of the last three, outstanding, disputed claims.) Funds for the distribution were received from Physicians for Healthy Hospitals, Inc. and its real estate affiliate (“PHH”) in accordance with the Valley Health System plan of adjustment. Further funds are due from PHH and, assuming such funds are received, the disbursing agent expects to make substantial, additional distributions to creditors over the next 6-24 months.

Please contact Ron Winters (914-391-9629) or Michael Congedo (973-722-0046) of Alvarez & Marsal, or Jeff Kandel (310-277-6910) of Pachulski Stang Ziehl & Jones, for more information.

Postconfirmation Case Update

On October 13, 2010, the sale of substantially all assets of Valley Health System, a California Healthcare District (the "District"), to Physicians for Healthy Hospitals, Inc. ("PHH") closed.  The sale was the major component of the First Amended Plan for Adjustment of Debts of Valley Health System Dated December 17, 2009, as Modified February 19, 2010 (the "Plan")The Plan provided for payments of approximately $17 million to unsecured creditors in Class 2A under the Plan, over a period over four years; the first payment of $2 million was made in October 2010.  Pachulski Stang Ziehl & Jones ("PSZJ") through Jeff Kandel of the Los Angeles office, represented the official creditors' committee (the "Old Committee") in the District's chapter 9 case, which was commenced in 2007.  At the beginning of the case, Valley Health System was a healthcare system composed of three hospitals, a skilled nursing facility, and a medical office building, based in Riverside County, California.

On April 26, 2010, the United States Bankruptcy Court for the Central District of California entered its Order (i) Confirming First Amended Plan for Adjustment of Debts of Valley Health System Dated December 17, 2009, as Modified February 19, 2010, and (ii) Granting Judgment for Valley Health System in Each Challenge Action (the "Confirmation Order").  Upon the sale closing, the Plan became effective and binding on all parties in interest in the chapter 9 case.  In accordance with the Plan and a separate agreement between the Old Committee and the District, the Old Committee has been dissolved, and a posteffective date committee (the " New Committee") has been created to represent Class 2A Claimants under the Plan. The members of the New Committee are: Memorial Care Health Services/Anaheim Memorial Medical Center (chair), HCR Manor Care, Hemet Community Medical Group, and Loma Linda University Medical Center.

PSZJ has been retained by the New Committee to provide legal advice. The New Committee has retained Alvarez & Marsal Healthcare Industry Group as its financial advisors and to serve as the disbursing agent under the Plan. Together they will ensure and enforce the District's compliance with the Plan and PHH's obligations to Class 2A Claimants. They will (a) assess the filed Class 2A proofs of claim and their supporting documentation, if any, (b) object to the allowance of any Class 2A Claims, (c) receive from PHH all funds to be distributed to Class 2A Claimants, and (d) distribute pro rata (subject to subordination agreements entered into by holders of certain Class 2A Claims) to the holders of Allowed Class 2A Claims all funds received from PHH that remain after paying its fees and costs and those of any professional person retained by the disbursing agent and by the New Committee to assist them in discharging their functions.

Case Information

On December 13, 2007, Valley Health System ("Valley Health")  commenced chapter 9 case number 07-18293 in the United States Bankruptcy Court for the Central District of California in Riverside, California ("Bankruptcy Court").  Honorable Peter Carroll is the presiding judge.

Committee Appointment

Please contact Mr. Kandel at the email address or telephone number listed on this site with any questions, comments, or requests regarding Valley Health's chapter 9 bankruptcy case.

For information on how to gain access to all documents filed in this case (in addition to the documents available  this site), please click on the "Register as a PACER User" link.