By: Daniel Hart and Salene Mazur Kraemer
On September 11, 2015, the Please Touch Museum in Philadelphia filed for Chapter 11 bankruptcy (Bankruptcy Case no. 15-16558) in the United States Bankruptcy Court for Western District of Pennsylvania, thus triggering an automatic stay or injunction pursuant to 11 U.S.C. 362 of the Bankruptcy Code that halts actions by creditors, with certain exceptions, to collect debts from the debtor who has declared bankruptcy. “Don’t Touch the Debtor”.
The museum intends to remain as a debtor-in-possession and continue operating during the pendency of the Chapter 11 Case. The museum’s mission is to enrich the lives of children by creating learning opportunities through play. It aims to achieve this mission by creating meaningful interactive play-based experiences within the museum and beyond its walls for all young children and their families. The museum has been nationally recognized for its lasting impact.
The museum filed for protection under Chapter 11 bankruptcy because it borrowed more money then it could pay back to renovate a new home in Fairmount Park’s Memorial Hall. Sources say the bankruptcy filing has two main objectives: (i) to shed the majority of the $60 million it owes holders of its debt, and (ii) to negotiate a deal whereby the museum turns over maintenance and repairs of Memorial Hall to the city, which owns it.
The museum owes about half of its debts to a group of bondholders. It formulated a plan to pay back these bondholders about $11.5 million of the $60 million debt. Filing for bankruptcy was a tactic used to get this bondholder group to agree to the plan. Also, the museum is launching a $10 million fund-raising rescue plan. In addition to paying off the debt, the museum intends to use the money to pay professional fees associated with the bankruptcy and to make some exhibit upgrades. It remains to be seen whether this strategy will solve the museum’s problems.
On September 3, 2013 Fairmont General Hospital, Inc. of Fairmont, WV and affiliate company Fairmont Physicians, Inc. (“debtors”) filed voluntary petitions for bankruptcy relief under Chapter 11 of the bankruptcy code with Fairmont General Hospital, Inc. as the lead debtor. The petitions were filed with the United States Bankruptcy Court for the Northern District of West Virginia with the assigned case numbers 1:13-bk-01054 and 1:13-bk-01055 respectively. The cases were assigned to the Honorable Judge Patrick M. Flatley (who is originally from Salene’s hometown of Weirton by the way) and consolidated (by debtors’ request) under case number 1:13-bk-01054.
The Debtors’ Chapter 11 Plan and Disclosure Statement are due by January 2, 2014. Schedules A-J were originally due on September 17, 2013 as were a Statement of Financial Affairs, Statement of Operations, Federal Income Tax Return, and other filings. (Please see the docket summary for a complete list of due filings.) At the time of filing, the debtors made multiple motions including motions to extend the time before the required Schedules and other would become due, maintain existing financial institutions and practices, pay pre-filing debts and obligations, and maintain utility services. All of these motions were granted. For a complete breakdown of the case please refer to the docket summary. The Meeting of Creditors has been set for Thursday, October 31, 2013 at 10:00 AM.
Fairmont General Hospital (FGH) is a private, non-profit, community hospital that was originally founded in 1939. FGH offers a variety of health services including surgical, rehabilitation, mental health, wellness/testing, emergency services, and more. For a complete list of the services they offer please click here.
The debtors claim assets and liabilities between $10 and $50 million. Notably, the debtors are currently seeking a strategic partner to take over its facility. The debtors are represented by Rayford K. Adams, III of Spilman, Thomas, & Battle, PLLC. Spilman, Thomas, & Battle, PLLC has seven offices spread across West Virginia, Pennsylvania, Virginia, and North Carolina with three of their offices located in West Virginia.