According to the U.S. Bankruptcy Court docket, University General Health System (UGHS) and eight of its subsidiaries filed for Chapter 11 protection in the Southern District of Texas, lead case number 15-31086. The Company, which provides a diversified, integrated, multi-specialty health care delivery system, is represented by Joshua W. Wolfshohl of Porter Hedges. The Company announced that MidCap Financial Trust will provide debtor-in-possession financing to fund ongoing operations. UGHS expects to utilize the Chapter 11 process to reduce its debt and strengthen its balance sheet.
“The filing was a difficult decision, but one that the Board believes will allow the Company to focus on improving operations at its flagship Houston hospital and creating a stronger financial foundation upon which to build its comprehensive strategic plan,” explains Hassan Chahadeh, M.D., chairman and C.E.O. of UGHS. “This restructuring, once fully implemented, should provide UGHS with a much improved balance sheet and a capital structure that is more appropriate for its current business model,” Chahadeh continues.
According to a corporate release, the Company blames the Chapter 11 filing on liquidity issues, which resulted from unprofitable acquisitions and unfavorable managed care agreements. UGHS further announced that with the imminent closing of the sale of the Senior Living Segment, Donald W. Sapaugh has resigned as president but will remain on the board as an independent board member and a vital part of the restructuring process. Dr. Chahadeh will assume the role of president as well as chief executive officer. Learn more about this bankruptcy.