================================================================= SAINT VINCENT BANKRUPTCY NEWS Issue Number 1 ----------------------------------------------------------------- Copyright 2005 (ISSN XXXX-XXXX) July 6, 2005 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 215-945-7000 FAX 215-945-7001 ----------------------------------------------------------------- SAINT VINCENT BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 572 Fernwood Lane, Fairless Hills, Pennsylvania 19030, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' cases. New issues are prepared by Catherine L. Gutib, Julie Anne G. Lopez, Christopher G. Patalinghug, Frauline S. Abangan and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re- mailing of SAINT VINCENT BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00000] HOW TO SUBSCRIBE TO SAINT VINCENT BANKRUPTCY NEWS [00001] BACKGROUND & DESCRIPTION OF SAINT VINCENT HOSPITAL [00002] SAINT VINCENT'S BALANCE SHEET AT APRIL 30, 2005 [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING [00004] SAINT VINCENT'S CHAPTER 11 DATABASE [00005] LIST OF SAINT VINCENT'S 30-LARGEST UNSECURED CREDITORS [00006] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES [00007] DEBTORS' MOTION FOR AUTHORITY TO USE CASH COLLATERAL KEY DATE CALENDAR ----------------- 07/05/05 Voluntary Petition Date 07/20/05 Deadline for filing Schedules of Assets and Liabilities 07/20/05 Deadline for filing Statement of Financial Affairs 07/20/05 Deadline for filing Lists of Leases and Contracts 07/25/05 Deadline to provide Utilities with adequate assurance 09/03/05 Deadline to make decisions about lease dispositions 10/03/05 Deadline to remove actions pursuant to F.R.B.P. 9027 11/02/05 Expiration of Debtors' Exclusive Plan Proposal Period 01/01/06 Expiration of Debtors' Exclusive Solicitation Period 07/05/07 Deadline for Debtors to Commence Avoidance Actions Organizational Meeting with UST to form Committees First Meeting of Creditors pursuant to 11 USC Sec. 341 Bar Date for filing Proofs of Claim ----------------------------------------------------------------- [00000] HOW TO SUBSCRIBE TO SAINT VINCENT BANKRUPTCY NEWS ----------------------------------------------------------------- SAINT VINCENT BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. 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Name: ---------------------------------------------- Firm: ---------------------------------------------- Address: ---------------------------------------------- ---------------------------------------------- Phone: ---------------------------------------------- Fax: ---------------------------------------------- E-Mail: ---------------------------------------------- (Distribution to multiple professionals at the same firm is provided at no additional cost.) SAINT VINCENT BANKRUPTCY NEWS is distributed to paying subscribers by electronic mail. New issues are published on an ad hoc basis as significant activity occurs (generally every 10 to 20 days) in the Debtors' chapter 11 proceeding. The subscription rate is US$45 per issue. Newsletters are delivered via e-mail; invoices, transmitted following publication of each newsletter issue, arrive by fax. Re-mailing of SAINT VINCENT BANKRUPTCY NEWS is prohibited. Distribution to multiple individuals at the same firm is provided at no additional charge; folks outside of your firm should set-up and pay for their own subscriptions. Subscriptions may be canceled at any time without further obligation. ----------------------------------------------------------------- [00001] BACKGROUND & DESCRIPTION OF SAINT VINCENT HOSPITAL ----------------------------------------------------------------- Saint Vincents Catholic Medical Centers of New York dba Saint Vincent Catholic Medical Centers 153 West 11th Street New York, New York 10011 Telephone (718) 558-7280 http://www.svcmc.org/ Saint Vincent Catholic Medical Centers is one of the New York metropolitan area's most comprehensive health care systems, serving nearly 600,000 people annually. SVCMC was established in 2000 as a result of the merger of Catholic Medical Centers of Brooklyn and Queens, Saint Vincents Hospital and Medical Center of New York, and Sisters of Charity Healthcare in Staten Island. Sponsored by the Roman Catholic Bishop of Brooklyn and Sisters of Charity of New York, SVCMC serves as the academic medical center of New York Medical College in New York City. The System includes these seven hospitals: * Mary Immaculate Hospital, Queens, * St. John's Queens Hospital, * St. Mary's Hospital of Brooklyn, * St. Vincent's Hospital Manhattan, * St. Vincent's Hospital Staten Island, * Bayley Seton Hospital, Staten Island, and * St. Vincent's Hospital Westchester SVCMC's resources include over 2,500 physicians, four skilled nursing facilities, a system-wide home care service, a hospice and over 60 ambulatory care sites which provide a broad array of medical, psychiatric and substance abuse services. In 2004, SVCMC recorded over 92,000 inpatient discharges, more than 1,100,000 outpatient visits, and 640,000 home care visits. Its emergency rooms, which include three Level 1 trauma centers, received 255,000 visits in that same year. SVCMC is the largest private provider of EMS services in the New York City Fire Department's 911 service. Also in 2003, St. Clare's Hospital, now St. Vincent's Midtown, became affiliated with the healthcare system. Events Leading to Chapter 11 Timothy Weis, Chief Financial Officer of Saint Vincent Catholic Medical Centers of New York, relates that over the past several years, the healthcare environment has become particularly challenging for health care providers in New York. More patients are receiving their care in ambulatory settings, while lengths of stay have been reduced. Both of these factors led to declining inpatient volumes and a need to restructure the healthcare delivery system. These changes had a generally negative impact on SVCMC. Others factors like the growing cost of medical equipment and technology, decline in Medicare and Medicaid reimbursements, growth of managed-care plans, and the medical malpractice crisis, have likewise adversely affected SVCMC, Mr. Weis explains. SVCMC's 2005 Liquidity Crisis In an analysis conducted by Ernst & Young in 1998, it was estimated that if Catholic Medical Centers of Brooklyn and Queens, St. Vincent's Hospital and Medical Center, and Sisters of Charity Health Care on Staten Island continued to operate independently, the three organizations would have a combined operating loss of approximately $100 million by 2002. The same analysis predicted that a combined entity that took advantage of growth opportunities, as well as integration efficiencies, would have net income of $25 to $30 million for 2002. That analysis was the rationale for the merger of the three institutions, which led to the formation of SVCMC. Following the merger, SVCMC's management adopted goals designed to reduce costs, increase revenues and enhance the overall competitiveness of SVCMC in the marketplace. Although revenues increased, management was not able to contain costs, and losses were not reduced over the period from 2000-2004. The 2004 losses included a $60 million write-off of accounts receivable booked in prior years. SVCMC's management began to combine certain functions. However, SVCMC encountered some disruptions when it combined the business centers for the operating units in a central office. Migrating to a single information technology platform also led to initial integration difficulties. SVCMC further encountered resistance to renegotiating payor contracts to increase the health care system's revenues and to restructuring fixed-compensation physician contracts. Mr. Weis also believes that negative publicity concerning the health care system's financial condition has eroded SVCMC's traditional base of philanthropic support. By the end of 2003, SVCMC's board of directors decided it was necessary to retain the services of a turnaround team that could bring to SVCMC the resources, expertise, and experience to address the growing financial crisis for the health care system. In April 2004, SVCMC's board of directors selected David Speltz as the System's new president and Chief Executive Officer, Tim Weis as Chief Financial Officer, and other principals of the turnaround firm Speltz & Weis LLC to manage the turnaround. Speltz & Weis developed a turnaround plan, which was finalized in June 2004, and approved by SVCMC's board of directors and by the United States Department of Housing and Urban Development, and the Dormitory Authority of the State of New York -- SVCMC's two principal mortgage lenders. The turnaround plan projected more than $157 million in annual improvements by the end of 2006 through improvements in revenue recovery, managed care re-contracting, supply chain, labor and productivity improvements including physician compensation, and the reconfiguration of acute care services. In late 2004, SVCMC's management became aware that the audited financial statements reflecting prior years' accounts receivables were overstated by $60 million, which was confirmed by KPMG LLP, the Debtors' auditors, in connection with the 2004 audit. Because that fact came to light well after the turnaround plan had been prepared, it masked the magnitude of the revenue shortfall that the System faced. In addition, although SVCMC's performance in the first quarter of 2005 generally tracked the turnaround plan, beginning in March 2005, SVCMC began to experience softness in patient volume. Since March 2005, in-patient discharges have run approximately 5% below the corresponding months in 2004. The Debtors have investigated the current weakness in patient volumes and believe they are likely to persist through the summer of 2005, but should begin to recover to normal levels by the fourth quarter of 2005. Thus, despite a $23 million improvement in operating results in the first quarter of 2005, compared to the first quarter of 2004, in Spring 2005, it became apparent to SVCMC's management that it would need to supplement the original turnaround plan. In the Spring of 2005, Mr. Weis relates that SVCMC's management recommended a major restructuring of the System that included: -- the closure of St. Mary's Hospital in Brooklyn, which was announced in June 2005; -- the conversion of acute care beds at Mary Immaculate Hospital in Queens to behavioral beds; -- the consolidation of certain ancillary services; and -- the closure of certain economically marginal medical services. The Debtors believe that the restructuring plan, which supplements the 2004 turnaround plan, should serve as the core for an eventual plan of reorganization of the Debtors. The unanticipated weakness in patient volume has also reduced the amount of free cash flow generated by the System, and the Debtors have continued to incur losses in 2005. For the first four months of 2005, SVCMC generated operating losses of $21.3 million on revenues of $496 million. These losses left the Debtors with extremely limited liquidity throughout 2005. The Debtors' high level of indebtedness has contributed to their liquidity crisis. As of December 31, 2004, their total long-term debt and capital leases aggregated $423 million, including some debt of non-debtor affiliates and the working capital loan. In 2004, the Debtors paid approximately $70 million in principal and interest on their long-term debt. Arrears to Trade Creditors One consequence of the Debtors' lack of liquidity, Mr. Weis says, is that for some years they have been significantly in arrears to trade vendors, which has created both financial and operational obstacles. The Debtors owe approximately $240 million in respect of accounts payable and other current liabilities; the Debtors' accounts payable are, on average, more than 120 days outstanding. These arrearages have led to lawsuits commenced by creditors to collect accounts due to them, some interruptions in the delivery of goods and services, and some trade creditors being unwilling to continue to do business with the Debtors except on a cash-on- delivery basis. As a result of vendor pressures, from time to time the System's physicians were unable to schedule cases and procedures due to shortages in necessary equipment and supplies. The Debtors believe their inability to maintain supplies and properly working diagnostic equipment at levels sufficient to support their medical staff appropriately has contributed to the decrease in patient admissions in 2005. In addition to their cash flow from operations, the Debtors generated liquidity in 2005 from asset sales and the proceeds from real estate financing transactions. Through the Petition Date, these activities generated approximately $45 million in additional funds for the System. However, despite the liquidity provided by real estate transactions, the Debtors faced increasing liquidity pressure throughout the second quarter of 2005. For the first six months of 2005, the Debtors have paid approximately $40 million for debt service, essential capital expenditure and repayments to third parties. The cash provided by real estate transactions was used to pay these non-operating cash requirements. Also, during the second quarter of 2005, the Debtors' availability under their working capital line of credit decreased by approximately $18 million. On June 1, 2005, HFG-Healthco IV LLC, the Debtors' working capital lender, declared an event of default under its working capital facility. On June 30, 2005, HFG terminated the working capital facility. Throughout the second quarter of 2005, the Debtors undertook a variety of efforts to increase liquidity, including accelerating sales or financings of real property, and seeking to obtain additional lending facilities to ameliorate their liquidity crisis. The Debtors made the difficult decision to seek relief under chapter 11 when it became apparent that they would not be able to generate or obtain sufficient liquidity to continue their operations without a filing. Capital Structure and Prepetition Indebtedness "SVCMC's indebtedness for borrowed money consists of mortgages on substantially all their principal operating facilities, a working capital borrowing facility secured by a first lien on accounts receivable, and several other borrowing facilities," Ms. Weis relates. As of the Petition Date, the Debtors' aggregate indebtedness for borrowed money was $395 million, which includes $275 million of mortgage debt. The Debtors' principal mortgage creditors are the Dormitory Authority of the State of New York, which is owed $180 million as of the Petition Date, and Sun Life Assurance Company of Canada, which is owed $80 million as of the Petition Date. ----------------------------------------------------------------- [00002] SAINT VINCENT'S BALANCE SHEET AT APRIL 30, 2005 ----------------------------------------------------------------- Saint Vincents Catholic Medical Centers of New York Condensed Consolidated Balance Sheets As of April 30, 2005 (Unaudited) ASSETS Cash and cash equivalents $4,655,000 Investments 9,431,000 Assets designated for self-insurance funds - short-term investments at market 30,640,000 Assets whose use is limited - collateralized assets 37,162,000 Patients accounts receivable, less allowance for doubtful accounts 257,900,000 Accounts receivable other 45,986,000 Other current assets 35,887,000 --------------- Total current assets 421,661,000 Other: Depreciation reserve funds and collateralized assets 117,166,000 Assets designated for self-insurance - investments at market 36,675,000 Assets whose use is limited - investments at market 42,408,000 Other non-current assets 12,499,000 Land, buildings and equipment net of accumulated depreciation 341,522,000 --------------- Total Assets $971,931,000 =============== LIABILITIES AND NET ASSETS Current: Current installments of long term debt $330,080,000 Loan Payable - Pool Securitization -- HFG Loan 45,301,000 Repurchase agreement -- Accrued salaries and payroll taxes withheld 69,063,000 Current estimated liability for self-insurance 30,640,000 Accounts payable and accrued expenses 229,422,000 Estimated retroactive payables to third parties, net 97,824,000 --------------- Total current liabilities 802,330,000 Other: Long-term debt, excluding current installments 46,147,000 Estimated liability for self-insurance 140,080,000 Other non-current liabilities 113,718,000 299,945,000 Net assets: Unrestricted (185,226,000) Temporarily Restricted 30,531,000 Permanently Restricted 24,351,000 --------------- Total net assets (130,344,000) --------------- Total liabilities and net assets $971,931,000 =============== ----------------------------------------------------------------- [00003] COMPANY'S PRESS RELEASE ANNOUNCING CHAPTER 11 FILING ----------------------------------------------------------------- Chapter 11 Filing Allows Healthcare System to Function Throughout Reorganization NEW YORK, New York -- July 5, 2005 -- Saint Vincent Catholic Medical Centers, the largest Catholic healthcare provider in New York State, has filed a Chapter 11 bankruptcy petition with the U.S. Bankruptcy court for the Southern District of New York. Throughout the Chapter 11 process, Saint Vincent Catholic Medical Centers' facilities, programs and services will continue their normal operations. It is a reorganization process that will enable the system to deal with its debt, rationalize its operations, and better meet changing healthcare needs. Saint Vincent Catholic Medical Centers intends to emerge from the bankruptcy process and continue to provide healthcare services to its communities. Saint Vincent Catholic Medical Centers consists of seven hospitals located throughout Brooklyn, Queens, Manhattan, and Staten Island, along with four nursing homes and a home health care agency. The bankruptcy filing will not include three of its nursing homes -- Bishop Mugavero, Holy Family Home, and St. Elizabeth Ann's Healthcare and Rehabilitation -- along with St. Vincent's Midtown Hospital, because each operates as a separate corporate entity. Saint Vincent Catholic Medical Centers is a mission driven organization and access point to some of the most sophisticated medical care in New York. It also provided more than $104 million in charity care to the uninsured and poor in 2004. The goal of the bankruptcy filing is to bring Saint Vincent Catholic Medical Centers' costs, including its debt, in line with its revenues. A bankruptcy filing will give the system the time and means to restructure its debt, operations and finances to continue its mission of Catholic healthcare in New York. "Due to operating losses, debt levels, cash flow and accounts payable issues, and a severe liquidity crisis, Saint Vincent Catholic Medical Centers voluntarily chose bankruptcy protection at this time," said David Speltz, president and CEO of Saint Vincent Catholic Medical Centers. "During this process, our hospitals, nursing homes and home health care agency remain open and operating as usual. The system will retain its excellent physicians, maintain nursing levels for high quality care, and make capital investments in plant and equipment." A Chapter 11 process consists of several steps, including the following: -- During the bankruptcy proceeding, Saint Vincent Catholic Medical Centers will continue to function; -- An "automatic stay" immediately goes into effect, which prohibits, among other things, all actions by creditors against Saint Vincent Catholic Medical Centers to collect debt obligations incurred prior to the filing; -- Saint Vincent Catholic Medical Centers will prepare a "plan of reorganization" for presentation to various stakeholders in the process; -- Saint Vincent Catholic Medical Centers' creditors will vote to accept or reject the plan of reorganization; -- The court will approve the plan of reorganization; and -- Saint Vincent Catholic Medical Centers will emerge as a reorganized healthcare system. Throughout this process, daily operations will continue; employees will be paid, hospital and patient services will continue; and suppliers will be paid for goods and services received after the filing date. In response to its growing financial crisis, SVCMC initiated a turnaround plan in 2004, under the leadership of Speltz & Weis, LLC. To date, substantial improvements have been made, particularly in the revenue cycle process and the rebuilding of operational infrastructure. However, one consequence of the system's operating losses and resulting cash flow problems was an ongoing accounts payables issue that created both financial and operational obstacles. The turnaround initiative has been effective in working towards matching SVCMC's revenues with its expenses, but it cannot address the overwhelming debt that the system has accrued since its inception. In late 2004, SVCMC's management became aware that the audited financial statements on which the Turnaround Plan was based overstated prior years' revenues by $60 million. This masked the magnitude of the revenue shortfall that the system faced. Adjustments for the overstated accounts receivables helped contribute to a $153 million operating loss in 2004. A severe liquidity crisis experienced by SVCMC during the first half of 2005 led the system to conclude that the Chapter 11 process offered SVCMC the most viable way to restructure its debt and operations. The system expects to emerge from bankruptcy a more efficient, financially sound healthcare system. A number of issues make the current healthcare environment in New York particularly challenging including the shift in healthcare delivery to ambulatory care, flat or declining reimbursements from private and public payors, and rising medical costs, such as technology and malpractice insurance. Additionally, approximately 25% of New Yorkers lack health insurance. "The decision to seek bankruptcy protection was very difficult," said Richard Boyle, chairman of the Board of Saint Vincent Catholic Medical Centers. "The Board of Directors is confident that the system will emerge from bankruptcy protection a more efficient, financially sound healthcare system that will continue its Catholic healthcare mission in New York City." Patients interested in more information regarding the bankruptcy filing, can visit a special section of the system's Web site at http://www.svcmc.org or call 800-798-6714. ----------------------------------------------------------------- [00004] SAINT VINCENT'S CHAPTER 11 DATABASE ----------------------------------------------------------------- Lead Debtor: Saint Vincents Catholic Medical Centers of New York dba Saint Vincent Catholic Medical Centers 153 West 11th Street New York, New York 10011 Bankruptcy Case No.: 05-14945 Debtor-affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Surgical Service of St. Vincent's, P.C. 05-14946 Medical Service of St. Vincent's Hospital and Medical Center, P.C. 05-14947 CMC Cardiology Services P.C. 05-14948 CMC Radiological Services P.C. 05-14949 CMC Occupational Health Services P.C. 05-14950 CMC Physician Services, P.C. 05-14951 Type of Business: The Debtors, the largest Catholic healthcare providers in New York State, operate hospitals, health centers, nursing homes and a home health agency. See http://www.svcmc.org/ Chapter 11 Petition Date: July 5, 2005 Court: Southern District of New York (Manhattan) Judge: Prudence Carter Beatty Debtors' Counsel: Gary Ravert, Esq. Stephen B. Selbst, Esq. McDermott Will & Emery, LLP 50 Rockefeller Plaza New York, New York 10020 Tel: (212) 547-5598 Fax: (212) 547-5444 Debtors' Special Healthcare, Finance & Bankruptcy Counsel: Garfunkle, Wild & Travis, P.C. Debtors' Special Conflict Counsel: Dechert LLP Debtors' Financial Advisor: Huron Consulting Services LLC Debtors' Investment Banker: Cain Brothers & Company, LLC Debtors' Restructuring Advisor: Speltz & Weiss LLC Debtors' Claims, Noticing & Balloting Agent: Bankruptcy Services LLC Consolidated Financial Condition as of April 30, 2005: Total Assets: $971,931,000 Total Debts: $1,102,275,000 ----------------------------------------------------------------- [00005] LIST OF SAINT VINCENT'S 30-LARGEST UNSECURED CREDITORS ----------------------------------------------------------------- Entity Nature of Claim Claim Amount ------ --------------- ------------ Computer Sciences Corporation Trade Debt $12,070,208 Technology Management Group East 95-25 Queens Boulevard Rego Park, NY 11374 P.O. Box 22040 Albany, NY 12201-2040 Attn: Mark Greaker Tel: (800) 343-9000 Fax: (518) 257-4280 Amerisource Bergen Receivables Trade Debt $6,777,305 100 Friars Boulevard Thorofare, NJ 08086 P.O. Box 8500-41950 Account # 564476 Community Med. Philadelphia, PA 19178-4873 Attn: Debbie Wertz Tel: (800) 562-2526 Fax: (856) 848-7529 New York City Water Board Trade Debt $5,685,363 Finance Authority 75 Park Plaza, 6th Floor New York, NY 10007 Attn: Denise Richardson Tel: (718) 595-7000 Fax: (718) 760-7621 1199 SEIU Benefits Fund Trade Debt $3,996,217 330 West 42nd Street New York, NY 10036-6977 Attn: Bridget Crichlow Tel: (646) 473-9200 Fax: (646) 473-6279 Amerisource/Bergen (HIV) Trade Debt $3,860,512 P.O. Box 8500-41950 Philadelphia, PA 19178 Attn: Debbie Wertz Tel: (800-562-2526) Fax: (856-848-7529) Saint Vincent's Comprehensive Trade Debt $3,854,471 Cancer Center 111 Eighth Avenue New York, NY 10011 Attn: Bernadette Bianco Tel: (212) 367-1732 Fax: (212) 367-1707 Special Touch Home Care Service Trade Debt $2,881,427 2091 Coney Island Avenue Brooklyn, NY 11223 Attn: Steve Ostrovsky Tel: (718) 627-1122 Fax: (718) 258-2379 AI Credit Corporation Trade Debt $2,818,947 c/o Bettie Evans 1001 Winstead Drive, Suite 500 Cary, NC 27513 Tel: (212) 458-3250 Fax: (919) 234-2712 GE Medical Systems Trade Debt $2,726,746 c/o Accounts Receivable 5517 Collection Center Drive Chicago, IL 60693 Nursing Personnel Homecare Inc. Trade Debt $2,387,369 175 South 9 Street Brooklyn, NY 11211 Attn: Moses Schlesinger Tel: (917-674-0003)) Fax: (718-599-2227) Aramark Corporation Trade Debt $2,300,492 Nations Bank, Lockbox 651009 101 North Tryon Street Charlotte, NC 28256 Attn: Jim Toban Tel: (704) 375-1705 Fax: (704) 375-0942 St. John's University 8000 Utopia Parkway Jamaica, NY 14439 Attn: Dave Feldman Tel: (973) 202-3602 St. Elizabeth Anne's HC & Rehab Center 91 Tompkins Avenue Staten Island, NY 10304 Attn: Dave Feldman Tel: (973) 202-3602 153 West 11th Street New York, NY 10011 Attn: Tommy Nge 1011 Market Street Philadelphia, PA 19107-2988 Attn: Dave Feldman Tel: (973) 202-3602 Metro Blood Service Trade Debt $2,231,812 1150 Yonkers Avenue Yonkers, NY 10704 Attn: Laura Petitti Tel: (914) 237-0000 Fax: (914) 237-1662 Siemens Medical Solutions USA Trade Debt $2,171,592 51 Valley Stream Parkway Malvern, PA 19355 Attn: Jeff Cargaris Tel: (800-888-7436) Fax: (501-643-7439) Sodexho Marriott Services Inc. Trade Debt $2,148,388 100 Avon Meadow Avon, CT 03001 Attn: Liz Lamertti Tel: (860) 678-1023 Fax: (860) 678-1058 Access Nursing Services Trade Debt $2,006,210 411 Manville Road Pleasantville, NY 10570 Attn: John Tel: (212) 754-4333 Fax: (212) 754-5898 Cardinal Health Trade Debt $1,792,994 c/o Customer Service & Legal Department 401 Mason Road La Vergne, TN 37086 Tel: (800) 878-3837 Fax: (888) 206-3157 Criticare LLC Trade Debt $1,470,602 573 Valley Road, Suite 1 Wayne, NJ 07470 Attn: Jackie Morgensten Tel: (888) 337-9975 Fax: (888) 220-8875 Amerisource Corporation Trade Debt $1,248,104 100 Friars Boulevard Thorofare, NJ 08086 Attn: Debbie Wertz Tel: (800) 562-2526 Fax: (856) 848-7529 Aramark Service Master Trade Debt $1,222,361 1011 Market Street Philadelphia, PA 19107-2988 Attn: Jim Toban Tel: (215) 238-4001 Fax: (215) 238-6175 County Graphics Forms Trade Debt $1,202,395 Management 2 Stercho Road Linden, NJ 07036 Attn: Bob Gaudiosi Tel: (908) 474-9797 Fax: (908) 474-5232 1199 SEIU Pension Fund Trade Debt $1,169,390 330 West 42nd Street New York, NY 10036-6977 Attn: Bridget Crichlow Tel: (646) 473-9200) Fax: (646) 473-6279 Johnson & Johnson Health Care Trade Debt $1,072,738 5972 Collections Center Drive Chicago, IL 60693 Attn: Matt Henderson Tel: (513) 786-7000 Fax: (513) 786-7000 Baxter Healthcare Corporation Trade Debt $1,061,900 Lockbox #33037, 3rd Floor First Chicago National Bank Processing 300 Harmon Meadow Boulevard Secaucus, NJ 07094 Medtronic USA Inc. Trade Debt $1,019,193 c/o Jan Larsen/Bank of America Medtronic Lockbox Services 4642 Collection Center Drive Chicago, IL 60693 Boston Scientific Scimed Trade Debt $867,095 One Boston Scientific Place Nadick, MA 01760-1537 Attn: Customer Service Tel: (800) 832-7822 Fax: (800) 782-1357 Constellation Newenergy Inc. Trade Debt $852,945 Lockbox #642399 c/o Payment Center 500 First Avenue Pittsburg, PA 15219 Attn: Carrie Tel: (212) 885-6448 Fax: (212) 885-6445 Siemens Enterprise Network Trade Debt $784,819 900 Broken Sound Parkway Boca Raton, FL 33487 Attn: Jacob Rice Tel: (561) 923-8347 Fax: (858) 337-7900 P.O. Box 99076 Chicago, IL 60693-9076 PricewaterhouseCoopers LLP Trade Debt $770,285 125 High Street Boston, MA 02110 Tel: (617) 530-5000 Fax: (617) 530-5001 Immediate Home Care Inc. Trade Debt $724,971 204 Broadway Brooklyn, NY 11211 Attn: Shandy Tel: (718) 302-1000 Fax: (718) 384-3178 JSK Construction Corporation Trade Debt $707,077 c/o John Sucich 438 Fifth Avenue Pelham, NY 10803 Attn: John Sucich Tel: (914) 738-6770 Fax: (914) 738-6770 ----------------------------------------------------------------- [00006] DEBTORS' MOTION FOR JOINT ADMINISTRATION OF CASES ----------------------------------------------------------------- The Debtors sought and obtained an order authorizing and directing joint administration of their bankruptcy proceedings and use of a consolidated caption on all pleadings filed in their chapter 11 cases. Pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure, courts are authorized to jointly administer bankruptcy proceedings if the debtor entities are affiliated entities with proceedings pending in the same court. Stephen B. Selbst, Esq., at McDermott Will & Emery LLP, in Chicago, Illinois, relates that the Debtors consist of seven affiliated entities, which are "affiliates" as that term is defined in Section 101(2) of the Bankruptcy Code. The Debtors, therefore, believe that their cases may be jointly administered. Joint administration will eliminate the need for duplicative notices, applications, and orders, and thereby save considerable time and expense for the Debtors and their estates, Mr. Selbst says. Joint administration will also protect parties-in-interest by ensuring that the parties-in-interest in each of the cases will be notified of the various matters before the Court. The Debtors request that one general docket be maintained for all seven cases, and that the notices to creditors and other parties- in-interest be combined. Judge Beatty directs that all pleadings and papers filed in the Debtors' chapter 11 cases be captioned: UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF NEW YORK _________________________________ | In re | Chapter 11 | Case No. 05-14945 SAINT VINCENTS CATHOLIC MEDICAL | CENTERS OF NEW YORK d/b/a SAINT | (Jointly Administered) VINCENT CATHOLIC MEDICAL | CENTERS, et al., | | Debtors. | _________________________________| Mr. Selbst argued that the use of this simplified caption, naming only Saint Vincent Catholic Medical Centers d/b/a Saint Vincent Catholic Medical Centers without specific reference to the other Debtors, will eliminate cumbersome and confusing procedures and ensure uniformity with respect to pleading identification. Judge Beatty further directs the Clerk to make an entry in each affiliates' docket saying: "An order has been entered in this case directing the procedural consolidation and joint administration of the Chapter 11 cases of Saint Vincents Catholic Medical Centers of New York d/b/a Saint Vincent Catholic Medical Centers, CMC Physician Services, P.C., CMC Radiological Services P.C., CMC Cardiology Services P.C., CMC Occupational Health Services P.C., Medical Service of St. Vincent's Hospital and Medical Center, P.C., and Surgical Service of St. Vincent's, P.C. The docket in Case No. 05-14945 should be consulted for all matters affecting this case." Mr. Selbst assures the Court that the rights of the Debtors' creditors will not be adversely affected by the joint administration of the cases because each creditor may still file its claim against a particular estate. ----------------------------------------------------------------- [00007] DEBTORS' MOTION FOR AUTHORITY TO USE CASH COLLATERAL ----------------------------------------------------------------- Saint Vincent Catholic Medical Centers of New York tells Judge Beatty that its liquidity crisis has left it with virtually no available cash to fund ongoing operations. The Debtors project cash losses over during July and August: Saint Vincent Catholic Medical Centers of New York Short-Term Cash Flow Projections July 2005 Aug. 2005 Total --------- --------- ----- Cash Receipts Medicare PIP $18,704,076 $18,704,076 $37,408,152 Medicaid 24,000,000 24,975,000 48,975,000 All Other Payors 47,397,851 46,167,673 93,565,523 DOD 6,891,341 7,102,846 13,994,187 Long Term Care 7,254,274 7,571,864 14,826,138 Pool Receipts 3,981,912 3,718,374 7,700,286 Other Cash Receipts 3,600,000 4,500,000 8,100,000 Asset Divestitures -- 18,000,000 18,000,000 Loan Proceeds 4,800,000 -- 4,800,000 Captive PCs 574,075 723,505 1,297,580 ------------ ------------ ------------ Cash Receipts $117,203,529 $131,463,337 $248,666,866 ------------ ------------ ------------ Cash Disbursements Payroll & Benefits $72,378,012 $76,343,684 $148,721,696 Insurance 6,100,000 2,527,746 8,627,746 Rentals 1,237,000 2,475,551 3,712,551 Capital Leases 1,100,000 2,200,000 3,300,000 Capital Exp. 5,367,333 833,333 6,200,667 Drugs & Supplies 9,000,000 15,000,000 24,000,000 Physician Fees 2,449,000 3,475,000 5,924,000 Contract Labor 3,600,000 6,000,000 9,600,000 All Other Expenses 10,500,000 17,500,000 28,000,000 DOD/Texen Capitation 6,537,052 5,037,052 11,574,104 Salick Reimbursement 4,435,698 4,435,698 8,871,395 Professional Fees -- 1,500,000 1,500,000 Bankruptcy Fees -- 2,000,000 2,000,000 Critical Vendors 6,600,000 9,900,000 16,500,000 DIP Commitment Fee 346,296 -- 346,296 DIP Interest Payments 313,228 424,790 738,018 ------------ ------------ ------------ Cash Disbursements $129,963,619 $149,652,853 $279,616,472 ------------ ------------ ------------ Net Cash Flow ($12,760,090) ($18,189,516) ($30,949,606) ============ ============ ============ To purchase inventory, pay their employees, and continue their businesses and operations, the Debtors urgently need access to Cash Collateral securing repayment of prepetition secured debts owed to: Total Amount Collateral Owed Value Lender ------------ ------------ ------ $179,000,000 $349,000,000 Dormitory Authority of the State of New York 77,000,000 196,000,000 Sun Life Assurance Company of Canada 16,000,000 76,000,000 RCG Longview II, L.P. 50,000,000 84,000,000 Commerce Bank 35,000,000 134,000,000 HFG HealthCo-4 LLC 6,000,000 2,200,000 Primary Care Development Corporation Without immediate access to the Cash Collateral, the Debtors' operations will be severely disrupted and they will be forced to cease or sharply curtail operations of some or all of their facilities, Timothy Weis, SVCMC's Chief Financial Officer tells the Court. In turn, Mr. Weis continues, this would limit or eliminate the Debtors' ability to generate operating revenue, and that would destroy the going concern value of the Debtors' businesses. The Secured Creditors (for the most part) are oversecured by wide margins, Stephen B. Selbst, Esq., at McDermott Will & Emery LLP, tells the Court. The Debtors ask Judge Beatty for authority to continue using any Cash Collateral securing repayment of prepetition obligations to their Secured Creditors pursuant to section 363 of the Bankruptcy Code to fund their working capital needs. To provide the Secured Creditors with adequate protection, the Debtors will grant dollar-for-dollar postpetition replacement liens and superpriority administrative claim status to these Secured Creditors. Emergency Approval There is no question, Judge Beatty finds, that the Debtors have an immediate and continuing need to use cash collateral. On an emergency basis, Judge Beatty grants the Debtors authority, in the ordinary course of their businesses, to use any and all cash, income, receivables, proceeds received from or on account of their prepetition or post petition business operations, and all other cash equivalents constituting cash collateral within the meaning of section 363 of the Bankruptcy Code, including without limitation, proceeds, offsprings, rents, or profits of such Cash Collateral, pending interim and final hearings on this matter in order to avoid immediate and irreparable harm to their businesses and their estates. Interim Hearing The Court will convene an interim hearing to consider continued use of cash collateral on July 20, 2005, at 3:00 p.m., at which time the Court will also consider postpetition financing arrangements. *** End of Issue No. 1 ***