On Mar. 1, 2019, Am Law 100 firm Polsinelli closed a $65 million sale on behalf of EBH TopCo LLC/Elements Behavioral Health, Inc. treatment facilities to Project Build Behavioral Health, and its primary equity owner, Blue Mountain Capital Management, in a highly complex behavioral health transaction within the context of a Chapter 11 bankruptcy.
Over the last 15 months of negotiations, Polsinelli’s team of advisors managed the company’s corporate affairs, responsibilities as debtors in possession in Chapter 11, approval of the sale transaction and liquidating Chapter 11 plan by the Bankruptcy Court, and administrative services and employee leasing agreement to govern the company from sale approval until regulatory approval was obtained in numerous jurisdictions across the country. All of this culminated in the closing of the deal and finalization of the bankruptcy plan by way of United States Bankruptcy Judge Brendan L. Shannon, effective as of March 1, 2019.
EHB TopCo filed Chapter 11 on May 23, 2018, with $207 million of secured debt, $130 million in first-lien debt and $44 million in second-lien debt, in addition to significant other liabilities that totaled over $100 million. The company operated 13 inpatient treatment centers across eight states and more than 750 beds. EHB also owned 22 outpatient facilities which drew patients across all 50 states and 29 countries.
“This transaction touched every aspect of our national bankruptcy practice, as well as just about every other practice in our firm, and led to the resolution of complicated legal issues that you do not confront in your garden variety Chapter 11,” said Christopher A. Ward, Chair of Polsinelli’s Bankruptcy & Restructuring practice.
Ward and Shareholder Shanti Katona led Polsinelli’s bankruptcy work for EHB. Polsinelli Shareholders Bragg E. Hemme, Vice Chair of the Behavioral Health Law Group, and Paul A. Gomez, Chair of the Behavioral Health Law Group, managed the deal from the health care and transactional standpoint.
“We were able to put in place a team that could provide licensure, regulatory and day-to-day operational support to Elements during the transition, while effectively and efficiently leading it through an incredibly complex behavioral health transaction,” said Hemme. “Doing so in the context of Chapter 11 bankruptcy only added another dimension to the complexities.”
Polsinelli is an Am Law 100 firm with more than 850 attorneys in 22 offices. Ranked #30 for Client Service Excellence1 and #10 for best client relationships2 among 650 U.S. law firms, Polsinelli was also named among the top 30 best-known firms in the nation3. The firm’s attorneys provide value through practical legal counsel infused with business insight, and focus on health care, financial services, real estate, intellectual property, mid-market corporate, labor and employment, and business litigation.
12019 BTI Client Service A-Team Report
22017 BTI Industry Power Rankings
32018 BTI Brand Elite