U.S. Bank Equipment Finance Files Motion to Stop Hospital Sale



According to a bankruptcy court filing in the U.S. Bankruptcy Court for the Southern District of Mississippi, U.S. Bank Equipment Finance has filed a motion objecting to a proposal by Lifebrite Hospital Group to acquire all the assets owned by Pioneer Health Services (PHS) of Stokes County North Carolina. PHS filed for Chapter 11 bankruptcy on April 1, 2016.

According to the bankruptcy court documents, pursuant to a program agreement, U.S. Bank Equipment Finance provided a 48-month financing to support the acquisition of medical equipment from Stryker Flex Financial, a division of Stryker Sales Corporation, the originating medical equipment vendor. The transaction was entered into on February 26, 2014.

U.S. Bank said in its motion that Pioneer is in default of its agreement on the lease and is requesting relief from the automatic bankruptcy stay on creditors so it can repossess the equipment. U.S Bank noted it was entitled to either having the automatic stay lifted so it can repossess the equipment and liquidate its collateral, receive adequate protection from the debtor or have its lien attached to the proceeds of the sale of the equipment which should have priority over all other creditors.

PHS said in its bankruptcy filing, that it had suffered financial stress because of changes in the healthcare industry. The company cited decreases in reimbursement through high deductible plans and requirements to invest in an electronic health records system. The company also noted denials for appropriate hospital stays by insurance companies and delays in payment by those same insurance companies as factors that led to its decision to file for bankruptcy.


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