Mercy Iowa City bondholder, Preston Community Capital, is seeking court approval to distribute sale proceeds from Mercy’s assets to master trustee, Computershare Trust Company, in the amount of $26.8 million, “either at closing or as soon as practicable following closing of the sale,” according to court documents. The $26.8 million is just a fraction of […]
Mercy Iowa City bondholder,
Preston Community Capital, is seeking court approval to distribute sale proceeds from Mercy’s assets to master trustee, Computershare Trust Company, in the amount of $26.8 million, “either at closing or as soon as practicable following closing of the sale,” according to court documents.
The $26.8 million is just a fraction of what Mercy owes Preston Hollow and Computershare Trust. In August, the companies accused Mercy of breaching contracts connected with $63 million it borrowed via publicly-issued bonds, consequently petitioning the court to put the hospital into receivership.
In a court document, the bondholder and master trustee defended the lien against Mercy and asserted their security interest “in substantially all of Mercy Hospital’s real and personal property assets,” also requesting the court lift the automatic stay.
A Jan. 17 court document stated that there will be a a hearing to consider entry of the Cash Collateral Motion on a final basis for Feb. 22 at 10:30 A.M. at the Iowa Northern District Court, located at 111 7th Ave. SE Cedar Rapids.
Preston Hollow and Computershare’s claims are being added to the growing list of creditors that Mercy owes remittance to. In a court document filed Jan. 4, Mercy owes an estimated $83,000 for services rendered by ordinary course professionals between Oct. 1 - Dec. 31 2023. This does not include fees for attorneys, the restructuring officer, pension holders and other organizations Mercy owes money to.
The sale of Mercy’s assets is expected to close definitely by Jan. 31, when the sale between UI Health Care and Mercy Iowa City is complete.
