S&B Surgery Center Plan Confirmed

December 2009

On December 1, 2009, the plan of reorganization of S&B Surgery Center ("S&B") was confirmed by the Honorable Samuel L. Bufford, United States Bankruptcy Judge for the Central District of California.  S&B is an ambulatory surgery center located in Beverly Hills, California, that was forced into bankruptcy on April 27, 2009, by the collapse and closure of Century City Doctor's Hospital.  The S&B Plan was a "true" reorganization, with some existing equity holders, along with some new equity holders, contributing $1.5 million to pay the administrative expenses of the case and make a distribution to creditors.  Another $1.5 million was raised for creditors by selling stock owned by S&B in a subsidiary, and approximately $500,000 was provided to creditors from the collection of pre-bankruptcy accounts receivables.  Trade vendors and other providers of goods and services to S&B will be paid approximately 80% of the monies owed to them while other creditors, whose claims arise from obligations related to the failure of Century City Doctor's Hospital, will be paid about 7% immediately and have been given certain litigation rights that may, eventually, provide significantly greater recoveries for those creditors.  Through the bankruptcy S&B was able to discharge more than $35 million in debt, restructure its real property leases to reduce its monthly costs, create new shareholders, and eliminate unproductive shareholders, and monetize old accounts receivables for the benefit of its current creditors. 

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