Berkshire Health Systems

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Summary

Financial Advisor

Pittsfield, MA

Berkshire Health Systems (“BHS”) is a leading provider of comprehensive healthcare services. A private, not-for-profit organization, BHS serves the region through a network of affiliates which include Berkshire Medical Center, the BMC Hillcrest Campus, Fairview Hospital, Berkshire Visiting Nurse Association, BHS physician practices, and long-term care associate Berkshire Healthcare Systems.

BHS faced financial challenges due to an over-leveraged balance sheet, losses from a retirement community project, and declining revenues caused by economic factors. Carl Marks Advisors (CMA) served as financial advisor, successfully guiding the company through Chapter 11 bankruptcy and facilitating a complex, multi-party consensual plan of reorganization with secured noteholders, a municipal bond insurer, the indenture trustee, and unsecured creditors, including the PBGC.

Key Challenges
Leveraged Capital Structure
Reimbursement Challenges

Engagement Highlights

  • Served as financial advisor and successfully guided the company through Chapter 11 bankruptcy.
  • CMA forged a complex, multi-party consensual plan of reorganization with secured noteholders, municipal bond insurer, indenture trustee and unsecured creditors including the Pension Benefit Guarantee Corporation (“PBGC”).
    • BHS’s defined benefit pension plan had a claim of $27.3 million, CMA negotiated treatment via a $1.5 million note to the PBGC.
    • Negotiated holders of general unsecured claims to receive a 5% recovery.
  • CMA reviewed the company’s financial projections and recommended strategies to increase cash reserves and decrease the cost of a day of operations.
  • BHS was able to continue to serve its population of approximately 43,000 who would have few alternatives as the hospital is the only major medical facility and emergency care facility in the region.

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