Our attorneys are actively involved with our hospital, home health, nursing home, long-term care and other health care clients in connection with financing transactions, including tax-exempt bond financings, lines of credit, equipment leasing and various re-financings of the foregoing. In the bond transactions, we help our health care organization clients on structure issues that arise with respect to bond insurers, letter of credit banks, lenders, bondholders and trustees as well as relations with the state bond issuing authorities and the various state and federal agencies such as the Department of Health and Senior Services, HHS and HUD. This also includes representing for-profit health care providers and health care private equity firms in various financings in connection with purchasing companies and add-on acquisitions. We also provide ongoing advice regarding compliance with various covenants and obligations under financing documents.
When operational problems and financial markets fluctuations create adverse consequences for one of our health care organization clients, our finance group, in conjunction with our workout and insolvency specialists, provides insightful and aggressive counsel to develop various strategies for restructuring outstanding debt within the universe of competing claims of the organization’s bondholders, trustees, banks, bond insurers, suppliers, equipment lessors and other stakeholders.
As counsel to health care systems that constitute “Obligated Groups” under tax-exempt bond financings, equipment leases and bank credit facilities, we regularly advise on a variety of matters including:
- Permitted transfers of operating assets and non-operating assets between Obligated Group members and non-members, whether the non-members are foundations, other affiliates or third party non-affiliates;
- Permitted liens on assets of the Obligated Group;
- Adding and removing members to and from an Obligated Group;
- Mergers and acquisitions vis-à-vis other hospital systems;
- Corporate governance issues as to power and authority of the parent entity of the Obligated Group to control activities and decisions of subsidiary Obligated Group members with respect to financings, acquisitions, dispositions, operations and otherwise; and
- Fiduciary duties of the board of trustees of an Obligated Group member to other members of the Obligated Group.
In consultation with our health care transactional and compliance attorneys, we also advise hospitals on “private use” issues in connection with tax-exempt bond financings. “Private use” issues impact our clients when they lease space to others, or enter into certain management or services contracts, which involve the use of facilities and/or equipment which was financed in whole or in part with the proceeds of tax-exempt bond financings. In this regard, we routinely advise clients regarding qualifying for one of the management contract safe harbors set forth in IRS Revenue Procedure 97-13.