in the united states bankruptcy court for...

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IN THE UNITED STATES BANKRUPTCY COURT

FOR THE WESTERN DISTRICT OF TEXAS

EL PASO DIVISION

IN RE: §

EL PASO CHILDREN’S HOSPITAL

CORPORATION,

§

§

CASE NO. 15-30784

DEBTOR. § CHAPTER 11

§

EIN: 26-3075429 §

§

4845 ALAMEDA AVENUE §

EL PASO, TEXAS 79905 §

SECOND JOINT MOTION TO CONTINUE

FINAL HEARING ON CASH COLLATERAL

TO THE HONORABLE U.S. BANKRUPTCY JUDGE H. CHRISTOPHER MOTT:

COMES NOW El Paso Children’s Hospital Corporation (“EPCH” and/or “Debtor”) and

El Paso County Hospital District d/b/a University Medical Center (“UMC”), and jointly files

their Second Joint Motion to Continue Final Hearing on Cash Collateral (“Motion”). In support

thereof, the Debtor and UMC would respectfully show as follows:

I. INTRODUCTION

1. During the course of their participation in mediation, the Debtor and UMC agreed

to seek a continuance of the final hearing on the Cash Collateral Motion so that such hearing

may take place subsequent to the mediation scheduled between the parties and not on the heels of

the conclusion of the mediation. The Debtor and UMC participated mediation in El Paso on

June 25 and 26, 2015, and in Austin on June 30, 2015. Pursuant to the parties’ agreement, the

Debtor and UMC believe that the final hearing on the Cash Collateral Motion should be

continued to July 30, 2015, in Austin, Texas.

15-30784-hcm Doc#127 Filed 07/02/15 Entered 07/02/15 17:14:50 Main Document Pg 1 of 6

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II. JURISDICTION

2. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and

1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A) and (M). Venue of the

Debtor’s Chapter 11 case and this Motion in this district is proper pursuant to 27 U.S.C. §§ 1408

and 1409. The Court has the authority to enter the requested relief under Bankruptcy Code

§ 105(a) and 333(a)(1).

III. BACKGROUND

3. On May 19, 2015 (“Petition Date”), the Debtor filed its voluntary petition for

relief under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. § 101, et seq.

(as amended the “Bankruptcy Code”). The Debtor is a debtor-in-possession pursuant to

§§ 1107(a) and 1108 of the Bankruptcy Code. No request for the appointment of a trustee or

examiner has been made in this bankruptcy case, and no committee has been appointed or

designated.

4. A description of the background of the Debtor and the events leading up to the

filing of the voluntary petition by the Debtor, is provided in the Declaration of Mark Herbers in

Support of First Day Motions (“Herbers Declaration”) [Dckt. No. 12] which is incorporated

herein by reference.

5. The Debtor is an independent non-profit 501(c)(3) corporation that is governed by

a board of directors (“EPCH Board”), the sole mission of which has been to provide pediatric

care to the children of El Paso and the surrounding areas. The Debtor’s primary operations have

consisted of owning and operating a 122-bed children’s hospital.

6. On May 19, 2015, the Debtor filed its Emergency Motion Pursuant to 11 U.S.C.

§ 363 for (I) Authority to Use Cash Collateral in the Ordinary Course, (II) Provide Adequate

Protection, and (III) Scheduling Final Hearing (“Cash Collateral Motion”) [Dckt. No. 3].


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7. Subsequent to a hearing, the Court entered its Interim Order (I) Authorizing Use

of Cash Collateral, (II) Granting Adequate Protection, and (III) Scheduling Final Hearing

(“Interim Cash Collateral Order”) [Dckt. No. 28].

8. On June 4, 2015, the Debtor and UMC filed the Joint Motion to Continue Final

Hearing on Cash Collateral (“Motion to Continue”) [Dckt. NO. 58], requesting that the Court

continue the final hearing on cash collateral. On June 8, 2015, the Court conducted a hearing on

such Motion to Continue and granted the requested continuance. Also on June 8, 2015, the

Court entered the Second Interim Order (I) Authorizing Use of Cash Collateral, (II) Granting

Adequate Protection, and (III) Scheduling Final Hearing (“Second Interim Cash Collateral

Order”) [Dckt. No. 69]. Pursuant to the Second Interim Cash Collateral Order, a final hearing is

set on the Cash Collateral Motion for July 14, 2015, at 9:30 a.m. (MT), 10:30 a.m. (CT) in El

Paso, Texas.

IV. RELIEF REQUESTED

9. The Debtor and UMC request that the final hearing on the Cash Collateral Motion

be continued to July 30, 2015 in Austin, Texas. The parties have participated in mediation on

June 25 and 26, 2015, in El Paso, and then participated in another full day of mediation on June

30, 2015, in Austin. During the course of such mediation, the Debtor and UMC agreed to

request a continuance of the final hearing on the Cash Collateral Motion. Given the parties’

participation in mediation, and their agreement to request a continuance of the final hearing on

the Cash Collateral Motion, the Debtor and UMC believe such continuance would foster

efficiency in this case. In addition, UMC will consent to the entry of the proposed Third Interim

Order Granting Use of Cash Collateral (“Third Interim Cash Collateral Order”), authorizing the


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Debtor, pursuant to 11 U.S.C. § 363(a), (c)(1), and (c)(2) to use Cash Collateral1 to the extent

necessary to fund the Interim Budget for the period beginning May 19, 2015 to July 30, 2015, a

copy of which is attached hereto as Exhibit A. The proposed Third Interim Order Cash

Collateral Order also provides for the payment of two adequate protection payments to UMC by

the Debtor.

10. Good cause therefore exists for the requested continuance to permit the Debtor

and UMC to focus their efforts on the mediation toward a resolution of the dispute that

predominates this bankruptcy case. The requested continuance is not sought for delay, but so

that justice may be done. The Debtor and UMC thus respectfully request that the final hearing

on the Cash Collateral Motion be continued to July 30, 2015 in Austin.

WHEREFORE, PREMISES CONSIDERED, the Debtor and UMC jointly request that

the Court enter an order continuing the final hearing on the Cash Collateral Motion to July 30,

2015; and grant such other and further relief to the Debtor as the Court deems just.

Dated: July 2, 2015.

1 Capitalized terms not otherwise defined herein have the same meaning ascribed to them as in the Cash Collateral

Motion.


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Respectfully submitted,

JACKSON WALKER LLP

100 Congress Avenue, Suite 1100

Austin, Texas 78701

(512) 236-2000 – Main Telephone

(512) 236-2002 – Main Facsimile

www.jw.com

By: /s/ Jennifer F. Wertz

Patricia B. Tomasco

State Bar No. 01797600

(512) 236-2076 – Direct Dial

(512) 691-4438 – Direct Fax

Email: [email protected]

Jennifer F. Wertz


(512) 236-2247 – Direct Dial

(512) 391-2147 – Direct Fax


PROPOSED COUNSEL FOR THE

DEBTOR-IN-POSSESSION

/s/ Liz Boydston

Louis R. Strubeck, Jr.


Liz Boydston


Norton Rose Fulbright US LLP

2200 Ross Avenue, Suite 2600

Dallas, Texas 75201



[email protected]

[email protected]

COUNSEL FOR EL PASO COUNTY

HOSPITAL DISTRICT D/B/A

UNIVERSITY MEDICAL CENTER OF EL

PASO


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CERTIFICATE OF CONFERENCE

I hereby certify that on the 2nd day of July 2015, I communicated with Tiffany Strelow

Cobb, counsel for Cardinal Health, concerning the continuance requested herein, and she stated

that she objects to the requested continuance.

Further, I hereby certify that on the 2nd day of July 2015, I communicated with Morton

Branzburg, counsel for AmerisourceBergen Drug Corporation and ASD Specialty Healthcare,

Inc., concerning the continuance requested herein, and he stated that he objects to the requested

continuance.

/s/ Jennifer F. Wertz

Jennifer F. Wertz

CERTIFICATE OF SERVICE

I hereby certify that on the 2nd day of June 2015, a true and correct copy was served via

the Court’s CM/ECF electronic notification system upon the party listed below, and via United

States mail, postage prepaid upon the parties listed on the attached service list.

UNITED STATES TRUSTEE

Kevin Epstein, Trial Attorney

615 E Houston Street, Room 533

San Antonio, Texas 78205

/s/ Jennifer F. Wertz

Jennifer F. Wertz

13889420v.3 145048/00008




EL PASO DIVISION

IN RE: §


CORPORATION,

§ §

CASE NO. 15-30784


§

EIN: 26-3075429 §

§



THIRD INTERIM ORDER (I) AUTHORIZING USE OF CASH COLLATERAL, (II)

GRANTING ADEQUATE PROTECTION, AND (III) SCHEDULING FINAL HEARING

CAME ON TO BE CONSIDERED the Motion of the Debtor for an Order Pursuant to 11

U.S.C. § 363 for (i) Authority to Use Cash Collateral in the Ordinary Course; (ii) Provide

Adequate Protection, and (iii) Scheduling Final Hearing (the “Cash Collateral Motion”).1

Having considered the Motion, evidence proffered or presented, and arguments of

counsel, the Court hereby finds and concludes as follows:

1 Capitalized terms not defined herein shall have the meaning given to them in the Motion.

EXHIBIT A

15-30784-hcm Doc#127-1 Filed 07/02/15 Entered 07/02/15 17:14:50 Exhibit A Pg 1 of 13

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I. JURISDICTION

1. This Court has jurisdiction over this proceeding and the parties and property

affected hereby pursuant to 28 U.S.C. § 1334. Consideration of the Cash Collateral Motion

constitutes a core proceeding as defined in 28 U.S.C. § 157(b)(2)(A), (G), (K), (M), and (O).

Venue is proper in this district pursuant to 28 U.S.C. § 1409.

II. NOTICE

2. Under the circumstances, the notice given by the Debtor of the Cash Collateral

Motion and the Interim Hearing constitute due and sufficient notice thereof and complies with

Rules 2002 and 4001(b) of the Federal Rules of Bankruptcy Procedure (the “Bankrupty Rules”)

and the local rules of this Court.

III. FACTUAL BACKGROUND

3. On May 19, 2015 (“Petition Date”), the Debtor filed its voluntary petition for

relief under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. § 101, et seq.

(as amended the “Bankruptcy Code”). The Debtor is a debtor-in-possession pursuant to

§§ 1107(a) and 1108 of the Bankruptcy Code. No request has been made for the appointment of

a trustee or examiner, and no committee has been appointed in this case.

4. A description of the background of the Debtor and the events leading up to the

filing of the voluntary petition by the Debtor, is provided in the Declaration of Mark Herbers in

Support of First Day Motions, which is incorporated herein by reference.

5. The Debtor is an independent non-profit 501(c)(3) corporation that is governed by

a board of directors (“EPCH Board”), the sole mission of which has been to provide care to the

children of El Paso and the surrounding areas. The Debtor’s primary operations have consisted

of owning and operating a 122-bed children’s hospital.

EXHIBIT A


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6. To the Debtor’s knowledge, no creditors other than El Paso Hospital District d/b/a

University Medical Center (“UMC”), Cardinal Health,2 AmerisourceBergen Drug Corporation

(“ABDC”), and ASD Specialty Healthcare (“ASD”) claim liens on the Debtor’s cash collateral.

7. The Debtor is unable to pay the reasonable and necessary expenses of its ongoing

operations without permission for use of collateral and cash collateral in which security interests

and liens are claimed by UMC, Cardinal Health, ABDC, and ASD.

8. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157(b) (2)

(M) and 1334. The Debtor served notice of the Cash Collateral Motion by United States mail,

facsimile, or overnight delivery, prior to this hearing on UMC, Cardinal Health, ABDC, and

ASD, the United States Trustee, and the Debtor’s twenty largest unsecured creditors. Notice of

the Motion and opportunity for hearing were adequate and appropriate under the circumstances

of this case.

9. The terms and conditions for the Debtor to provide adequate protection to UMC,

Cardinal Health, ABDC, and ASD are proposed in good faith.

10. The proposed form of this Order submitted by the Debtor complies with the Local

Bankruptcy Rules for the United States Bankruptcy Court for the Western District of Texas,

except as described in the Motion and the disclosures of counsel at the hearing on the Motion.

UMC claims a security interest in substantially all of the assets of the Debtor. ABDC, ASD,

and Cardinal Health all claim a security interest in substantially all of the assets of the Debtor,

senior to the claims of UMC. No admission has been made by the Debtor, UMC, Cardinal

Health, ABDC, and ASD and no determination is made by this Court, as to the validity, priority,

amount, allowance, extent, or voidability of the security interest or claims of UMC, Cardinal

2 The term “Cardinal Health” shall mean all subsidiaries, related and affiliated companies of Cardinal Health, Inc.

EXHIBIT A


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Health, ABDC, or ASD. All relief granted hereunder to UMC, Cardinal Health, ABDC, and

ASD hereunder is only to the extent that a valid debt is secured by an unavoidable lien.

IT IS HEREBY ORDERED that the following terms shall apply:

A. Automatic Stay and Use of Cash Collateral

1. Authorization. Subject to this Order, the Debtor is hereby authorized under 11

U.S.C. § 363(a), (c)(1), and (c)(2) to use Cash Collateral to the extent necessary to fund the

Interim Budget (attached hereto as Exhibit A) for the period beginning on the Petition Date until

the earlier of: (A) July 30, 2015; or (B) the occurrence of a Termination Event (as set forth

below). The automatic stay of Bankruptcy Code § 362(a) shall continue in effect and until

further modified or terminated by the Court.

2. Adequate Protection Obligations. The Debtor is hereby authorized and ordered to

protect UMC, Cardinal Health, ABDC, and ASD under 11 U.S.C. §§ 361 and 363, as set forth

in this Order, for the Debtor’s post-petition use and consumption of UMC’s, Cardinal Health’s,

ABDC’s, and ASD’s “Pre-Petition Collateral” (as defined in Paragraph 6 hereof), the

continuation of the automatic stay against UMC’s, Cardinal Health’s, ABDC’s, and ASD’s

collection, sale or realization upon their Pre-Petition Collateral, and for any post-petition

diminution in value of UMC’s, Cardinal Health’s, ABDC’s, or ASD’s Pre-Petition Collateral, if

any (the “Adequate Protection Obligations”).

3. Use of Cash. The Debtor is authorized to use Cash Collateral (solely in

accordance and compliance with the Interim Budget) consisting of: (i) all funds held by the

Debtor on the Petition Date; and (ii) all receipts, receivables, and collections received or to be

received on or after the Petition Date. Further, the use of Cash Collateral shall be limited solely

to paying expenses in the amounts and at the times listed in the Interim Budget; provided

however, that the Debtor shall have authority to use Cash Collateral in excess of the amounts set

EXHIBIT A


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forth in the Interim Budget to the extent such a variance does not constitute a Termination Event

described in this Second Interim Order.

4. Termination of Use of Cash Collateral With Notice. A Termination Event shall

be deemed to have occurred three (3) business days after written notice sent to the Debtor by

UMC, Cardinal Health, ABDC, ASD, the U.S. Trustee, the official committee of unsecured

creditors, if any, (the “Committee”), or their respective counsel, of the occurrence of any of the

following:

i. the payment or incurrence by the Debtor of any material expense of a type not set forth in the Interim Budget;

ii. the payment of any expenses that would cause the aggregate expenditures under the Interim Budget for any weekly period to exceed the amount set forth in the Budget for such week by 10%.

iii. the failure of the Debtor to pay, within ten (10) days of the applicable due date, all undisputed administrative expenses in full in accordance with their terms as provided for in the Interim Budget except for any expenses under sections 503(b)(9) and/or 546(c) of the Bankruptcy Code;

iv. the failure of the Debtor to timely pay all fees due under 28 U.S.C. §1930; and

v. the failure of the Debtor to comply with, keep, observe or perform any of its agreements or undertakings under this Second Interim Order.

Unless the Debtor has cured the Termination Event(s) specified in the notice described above

prior to the expiration of the three-day period described in this Paragraph 4 or has obtained an

order of this Court that no such Termination Event has occurred, the Debtor’s authority to use

Cash Collateral hereunder shall then immediately terminate without further action.

5. Termination of Use of Cash Collateral Without Prior Notice. The Debtor’s

authority to use Cash Collateral hereunder shall terminate without any further action by this

Court and a Termination Event shall occur without prior notice upon the occurrence of any of

the following (each also a “Termination Event”):

EXHIBIT A


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i. the Debtor’s Chapter 11 case is dismissed or converted to a case under Chapter 7 of the Bankruptcy Code;

ii. the earlier of (a) the date of the entry of an order of this Court appointing a Chapter 11 trustee or an examiner with enlarged powers (beyond those set forth in Sections 1104(c) and 1106(a)(3) and (4) of the Bankruptcy Code) for the Debtor; or (b) the date the Debtor files a motion, application or other pleading consenting to or acquiescing in any such appointment; or

iii. this Court suspends the Debtor’s Chapter 11 Case under Section 305 of the Bankruptcy Code.

Upon the occurrence of a Termination Event described in this Paragraph 5, the Debtor’s

authority to use Cash Collateral hereunder shall automatically terminate.

6. Accounting and Information. Commencing on June 11, 2015, and continuing

every Thursday thereafter during the effectiveness of this Second Interim Order, the Debtor

shall provide to UMC, Cardinal Health, ABDC, ASD, the U.S. Trustee, the Committee, and

their respective counsel, a weekly report certified by the Debtor’s controller, bookkeeper, or

financial advisor and in the same form as the Interim Budget indicating all receipts received and

disbursements made by the Debtor in the week ending the prior Friday compared to the Interim

Budget and detailing any variances of more than 10% from the expenditures and receipts in the

Interim Budget. The Debtor shall provide information and reasonable access to the books and

records of Debtor to UMC, Cardinal Health, ABDC, ASD, and the Committee and their

professionals. Such information shall be provided within four (4) days of UMC’s, Cardinal

Health’s, ABDC’s, ASD’s, or the Committee’s request to Debtor’s counsel.

B. Continued Operations

7. Interim Budget. The Debtor is authorized to use cash collateral to fund its

reasonable and necessary operating expenses incurred after the Petition Date, and to fund those

specific employee payroll expenses on the condition that all such expenditures and all

reasonably and necessary post-petition expenses which accrued during the Interim Budget

EXHIBIT A


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period shall be consistent with the Interim Budget and all other provisions of this Second

Interim Order.3

C. Grant of Liens and Adequate Protection

8. Pre-Petition Collateral. “Pre-Petition Collateral” means all of (i) the Debtor’s

interest in any property which is subject to the security interests of UMC, Cardinal Health,

ABDC, and/or ASD under the agreements and documents executed by the Debtor pre-petition,

to the extent that Debtor’s interest therein was acquired by Debtor prior to the Petition Date, and

(ii) as to which UMC’s, Cardinal Health’s, ABDC’s, and/or ASD’s liens and security interests

are perfected, valid, and not avoidable, and (iii) the proceeds, products, rents, fees, charges,

accounts, payments for use or occupancy or profits thereof acquired after the Petition Date, to

the extent consistent with 11 U.S.C. § 552(b).

9. Adequate Protection Payments to UMC. The Debtor shall make two payments to

UMC, in the amount of $500,000 each, on July 1, 2015, and July 15, 2015, without prejudice to

the Debtor’s assertion that no amounts are due with respect to amounts asserted or alleged as

due by UMC as rental obligations from the Debtor and nothing herein, including the making of

payments to UMC hereunder, shall be deemed to be or construed in any way to be an admission

that any amounts are due from the Debtor to UMC with respect to any asserted or alleged rental

obligation to UMC.

10. Preservation of Lien on Pre-Petition Collateral. To the extent UMC’s, Cardinal

Health’s, ABDC’s, and/or ASD’s claims are allowed, perfected, non-avoidable, and secured

under 11 U.S.C. § 506(a) by Pre-Petition Collateral, UMC, Cardinal Health, ABDC, and ASD

shall remain entitled to the priority of their respective liens and security interests in the Pre-

Petition Collateral.

3 See Exhibit A attached hereto.

EXHIBIT A


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11. Post-Petition Collateral. “Post-Petition Collateral” shall mean the Debtor’s

interest in property which (i) first arises, is purchased, or acquired, or exists after the Petition

Date, and (ii) is not UMC’s, Cardinal Health’s, ABDC’s, or ASD’s Pre-Petition Collateral or

the proceeds, products, rents or profits thereof under 11 U.S.C. § 552(b).

12. Grant of Lien as Adequate Protection. To secure the Debtor’s Adequate

Protection Obligations under this Order and under Bankruptcy Code §§ 361(2), 362(d), and

363(e), each of UMC, Cardinal Health, ABDC, or ASD is hereby granted a lien upon all of the

Pre-Petition Collateral, all of the Post-Petition Collateral in the same order of priority and to the

extent UMC, Cardinal Health, ABDC, and ASD were each secured by an unavoidable lien that

existed pre-petition.

i. The grant of such lien is subject to the reservations of rights set forth in paragraph 19 hereof, the exclusions of paragraph 10, and any Carve Out Expenses in paragraph 11 below.

ii. UMC’s, Cardinal Health’s, ABDC’s, and ASD’s lien on Post-Petition Collateral shall have the priority of 11 U.S.C. § 364(c)(2) and (c)(3) with the same validity and priority as their respective liens and security interests in the Pre-Petition Collateral as existing immediately before the Petition Date.

13. Exclusions. UMC’s, ABDC’s, ASD’s, and Cardinal Health’s Post-Petition

Collateral excludes: (i) any claim for relief arising under Bankruptcy Code § 506(c), (ii) all

causes of action and bankruptcy avoidance powers enumerated in Chapter 5 of title 11, and (iii)

any proceeds thereof.

14. Carve Out Expenses. The lien on Post-Petition Collateral is subordinated to the

following “Carve out Expenses”:

i. fees payable to the United States Trustee pursuant to 28 U.S.C. §1930(a) (6); or

ii. reasonable fees payable to the Debtor’s or the Committee’s professionals, or any ombudsman appointed in this case, that may from time to time be

EXHIBIT A


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approved by this Court, which fees shall not exceed $20,000 for the interim period covered by this Order.

15. No Cross-Collateralization. Nothing in this Order shall be deemed to grant to

UMC, Cardinal Health, ABDC, or ASD a lien on Post-Petition Collateral for the purpose of

securing indebtedness to UMC, Cardinal Health, ABDC, or ASD which first arose before the

Petition Date, except Debtor’s Adequate Protection Obligations.

16. Perfection of Security Interests. All liens granted or to be granted to UMC,

Cardinal Health, ABDC, or ASD on the Post-Petition Collateral are deemed perfected and no

further notice, filing, recording, control agreement, bailment arrangement, or order shall be

required to effect such perfection under other State or Federal law. This Order shall be deemed

sufficient and conclusive evidence of the Liens granted hereunder.

D. Grant of Priority Claim to UMC, Cardinal Health, ABDC, and ASD

17. Administrative Claim. Pursuant to 11 U.S.C. § 361(3), UMC, Cardinal Health,

ABDC, or ASD shall each have allowed administrative claims to the extent of cash collateral

used as necessary to provide UMC, Cardinal Health, ABDC, and ASD with the equivalent of

their liens on Cash Collateral as of the Petition Date, with such administrative claims having the

same validity and priority as among UMC, Cardinal Health, ABDC, and ASD as their

respective liens and security interests in the Pre-Petition Collateral as existing immediately

before the Petition Date.

18. No Finding. Nothing in this Order shall be deemed a finding with respect to

adequate protection (as that term is described in § 361 of the Bankruptcy Code), of the interest

of UMC, Cardinal Health, ABDC, or ASD in the Pre-Petition Collateral.

19. Successors and Assigns. The provisions of this Order shall be binding upon the

Debtor, UMC, Cardinal Health, ABDC, ASD, and their respective successors and assigns,

EXHIBIT A


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including any trustee or representative of the estate hereafter appointed or elected in this

Chapter 11 case or in any subsequent Chapter 7 case.

20. Continuing Effect. If all or any of the provisions of this Order are hereafter

modified, vacated, or stayed by subsequent order of this Court or any other court, or on appeal,

such stay, modification, or vacation shall not affect (i) the validity or priority of any obligations

owed to UMC, Cardinal Health, ABDC, or ASD by the Debtor incurred prior thereto, or (ii) the

validity, enforceability, or priority of any lien or priority of UMC, Cardinal Health, ABDC, or

ASD with respect to the Debtor’s Adequate Protection Obligations. Any Adequate Protection

Obligations of the Debtor arising prior to the effective date of such stay, modification, or

vacation, shall be governed by the original provisions of this Order.

21. Service of Pleadings. Debtor shall serve a copy of all pleadings or reports,

including monthly operating reports, heretofore or hereafter filed with the Court concurrently

with the filing by Debtor, on the U.S. Trustee, the Committee (if any), UMC, Cardinal Health,

ABDC, ASD, and counsel to the foregoing.

22. Reservation of Rights. The Debtor, UMC, Cardinal Health, ABDC, ASD, and all

parties in interest shall be deemed to reserve their respective rights and remedies under pre-

petition agreements, and other applicable law. Nothing in this Order shall be deemed to

prejudice, waive, or release the rights and remedies of the Debtor, or any party in interest arising

under the Bankruptcy Code or other applicable law, including any avoidance actions and

defenses thereto. Any adequate protection payments, priorities, liens, or other matters provided

for under this Order shall not constitute an admission or determination that UMC, Cardinal

Health, ABDC, or ASD is owed any money, is secured, over-secured or under-secured.

EXHIBIT A


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23. Continued Hearing, Service and Notice. Pursuant to Bankruptcy Rule 4001, there

shall be a final hearing on the Debtor’s continued use of cash collateral, any objection(s)

thereto, any request for adequate protection, or any motion by the Debtor, UMC, Cardinal

Health, ABDC, or ASD for approval of any agreement or stipulation to use cash collateral under

11 U.S.C. § 363 or to obtain credit under 11 U.S.C. § 364, and on any related motion which

may be filed regarding cash collateral, adequate protection, or credit on July 30, 2015, at 12:30

p.m. (MT), 1:30 p.m. (CT) in the U.S. Bankruptcy Court, 903 San Jacinto Blvd., Austin,

Texas (the “Final Hearing”). Parties shall file and serve objections and exchange witness and

exhibit lists on or before July 23, 2015.

###

Prepared and submitted by:

Patricia B. Tomasco State Bar No. 01797600 Jennifer F. Wertz State Bar No. 24072822 Jackson Walker LLP 100 Congress Avenue, Suite 1100 Austin, Texas 78701 (512) 236-2000 – Main Telephone (512) 236-2002 – Main Facsimile

PROPOSED COUNSEL FOR THE DEBTOR

13889424v.2 145048/00008

EXHIBIT A


El Paso Children's HospitalWeekly Cash Forecast (for weeks ending)Actuals Through:

6/19/2015

Month Jun Jun Jul Jul Jul Jul Jul Aug Aug Aug Aug Sep Sep SepActual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13 13 Week(in thousands) 6/19/15 6/26/15 7/3/15 7/10/15 7/17/15 7/24/15 7/31/15 8/7/15 8/14/15 8/21/15 8/28/15 9/4/15 9/11/15 9/18/15 Total

ReceiptsPatient Related Receipts 1,390$ 1,439$ 1,339$ 1,339$ 1,739$ 1,689$ 1,539$ 1,339$ 1,339$ 1,689$ 1,689$ 1,289$ 1,289$ 1,689$ 19,407$ Other Receipts ‐ 100 ‐ ‐ ‐ 100 ‐ ‐ ‐ 100 ‐ ‐ ‐ ‐ 300

Total Receipts 1,390 1,539 1,339 1,339 1,739 1,789 1,539 1,339 1,339 1,789 1,689 1,289 1,289 1,689 19,707

DisbursementsUMUMC ‐ (532) (500) ‐ (500) ‐ (1,228) ‐ ‐ ‐ (1,228) ‐ ‐ ‐ (3,988) TT Texas Tech ‐ (398) ‐ ‐ ‐ ‐ (1,040) ‐ ‐ ‐ (1,040) ‐ ‐ ‐ (2,478) PAYPayroll (60) (1,099) (25) (1,099) (25) (1,099) (25) (1,099) (25) (1,099) (25) (1,099) (25) (1,099) (7,843) PH Pharmaceuticals / Medical Supplies (186) (139) (239) (85) (239) (85) (239) (85) (239) (85) (239) (85) (239) (85) (2,083) PH Physicians (31) (117) (44) (192) (44) (255) (44) (192) (44) (255) (44) (192) (44) (255) (1,722) OT Other Disbursements (269) (413) (419) (444) (769) (419) (419) (444) (419) (769) (419) (444) (419) (769) (6,572) NONon‐Recurring Disbursements ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Debt Service (Interest, Fees) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Total Disbursements (546) (2,699) (1,227) (1,820) (1,577) (1,858) (2,996) (1,820) (727) (2,208) (2,996) (1,820) (727) (2,208) (24,686)

Operating Cash Flow 844 (1,160) 112 (481) 162 (69) (1,457) (481) 612 (419) (1,307) (531) 562 (519) (4,979)

Non‐Operating CashflowsProfessional Fees ‐ (300) ‐ ‐ ‐ (500) ‐ ‐ ‐ ‐ (500) ‐ ‐ ‐ (1,300) Restructuring Costs ex Professional Fees ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Total Non‐Operating Cashflows ‐ (300) ‐ ‐ ‐ (500) ‐ ‐ ‐ ‐ (500) ‐ ‐ ‐ (1,300)

Net Cash Flow 844$ (1,460)$ 112$ (481)$ 162$ (569)$ (1,457)$ (481)$ 612$ (419)$ (1,807)$ (531)$ 562$ (519)$ (6,279)$

Cash Balance (Book) excl ST Inv AcctBeginning Balance 2,571$ 3,415$ 1,955$ 2,067$ 1,585$ 1,747$ 1,177$ 721$ 239$ 851$ 431$ 625$ 93$ 655$ 3,415$

Net Cash Flow 844 (1,460) 112 (481) 162 (569) (1,457) (481) 612 (419) (1,807) (531) 562 (519) (6,279) Net Investment Acct Transfers ‐ ‐ ‐ ‐ ‐ ‐ 1,000 ‐ ‐ ‐ 2,000 ‐ ‐ ‐ 3,000 Other ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Ending Balance 3,415$ 1,955$ 2,067$ 1,585$ 1,747$ 1,177$ 721$ 239$ 851$ 431$ 625$ 93$ 655$ 135$ 135

ST Investment Account BalanceBeginning Balance 8,120$ 8,120$ 8,120$ 8,120$ 8,120$ 8,120$ 8,120$ 7,120$ 7,120$ 7,120$ 7,120$ 5,120$ 5,120$ 5,120$ 8,120$

Additions ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Withdrawals ‐ ‐ ‐ ‐ ‐ ‐ (1,000) ‐ ‐ ‐ (2,000) ‐ ‐ ‐ (3,000)

Ending Balance 8,120$ 8,120$ 8,120$ 8,120$ 8,120$ 8,120$ 7,120$ 7,120$ 7,120$ 7,120$ 5,120$ 5,120$ 5,120$ 5,120$ 5,120

Unencumbered CashNavigant ‐ Cymetrix ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ 990$ 990$ 990$ 990$ 990$ Other ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Total ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ 990$ 990$ 990$ 990$ 990

Available Cash 11,535 10,075 10,187 9,705 9,867 9,297 7,841 7,359 7,971 7,551 6,735 6,203 6,765 6,245 6,245

6/29/2015, 10:47 PM Page 1 of 2

EXHIBIT A


El Paso Children's HospitalWeekly Cash Forecast (for weeks ending)Actuals Through:

6/19/2015

Month Jun Jun Jul Jul Jul Jul Jul Aug Aug Aug Aug Sep Sep SepActual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13 13 Week(in thousands) 6/19/15 6/26/15 7/3/15 7/10/15 7/17/15 7/24/15 7/31/15 8/7/15 8/14/15 8/21/15 8/28/15 9/4/15 9/11/15 9/18/15 Total

UMC Balance TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD

Texas Tech Balance RollforwardBeginning Balance 10,250$ 10,250$ 9,852$ 9,852$ 9,852$ 10,892$ 10,892$ 9,852$ 9,852$ 10,892$ 10,892$ 9,852$ 9,852$ 10,892$ 10,892

Accruals/Invoices ‐ ‐ ‐ ‐ 1,040 ‐ ‐ ‐ 1,040 ‐ ‐ ‐ 1,040 ‐ 3,120 Payments ‐ (398) ‐ ‐ ‐ ‐ (1,040) ‐ ‐ ‐ (1,040) ‐ ‐ ‐ (2,478) Adjustments ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Total 10,250$ 9,852$ 9,852$ 9,852$ 10,892$ 10,892$ 9,852$ 9,852$ 10,892$ 10,892$ 9,852$ 9,852$ 10,892$ 10,892$ 11,534$

Restructuring Costs / Professional FeesJackson Walker ‐$ ‐$ ‐$ ‐$ ‐$ (200)$ ‐$ ‐$ ‐$ ‐$ (200)$ ‐$ ‐$ ‐$ (400)$ AlixPartners ‐ (200)$ ‐ ‐ ‐ (200)$ ‐ ‐ ‐ ‐ (200)$ ‐ ‐ ‐ (600) Other (Inc. any appt’d. pat. care ombud.) ‐ (100) ‐ ‐ ‐ (100) ‐ ‐ ‐ ‐ (100) ‐ ‐ ‐ (300) Total ‐$ (300)$ ‐$ ‐$ ‐$ (500)$ ‐$ ‐$ ‐$ ‐$ (500)$ ‐$ ‐$ ‐$ (1,300)$

Other Non‐Recurring DisbursementsNavigant ‐ Cymetrix ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ 401K Employer Contribution ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Total ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$

Note: (1) UMC facility lease payment deferred until after post‐emergence date

6/29/2015, 10:47 PM Page 2 of 2

EXHIBIT A


1



EL PASO DIVISION

IN RE: §


CORPORATION,

§

§

CASE NO. 15-30784


§

EIN: 26-3075429 §

§



ORDER GRANTING SECOND JOINT MOTION TO

CONTINUE FINAL HEARING ON CASH COLLATERAL

CAME ON FOR CONSIDERATION the Second Joint Motion to Continue Final Hearing

on Cash Collateral (“Joint Motion”) filed by the Debtor and El Paso County Hospital District

d/b/a University Medical Center (“UMC”). The Court, having reviewed same, and found that

notice of the Joint Motion was proper, is of the opinion that the Joint Motion should be granted;

it is therefore

ORDERED ADJUDGED and DECREED that the Joint Motion is hereby GRANTED; it

is further

15-30784-hcm Doc#127-2 Filed 07/02/15 Entered 07/02/15 17:14:50 Proposed Order Pg 1 of 2

2

ORDERED that the final hearing on the Cash Collateral Motion (as defined in the Joint

Motion) is hereby reset to July 30, 2015 at 12:30 p.m. (MT), and 1:30 p.m. (CT) in Austin,

Texas.

###

Prepared and submitted by:

Jackson Walker LLP

100 Congress Avenue, Suite 1100

Austin, Texas 78701

Patricia B. Tomasco


Jennifer F. Wertz




PROPOSED COUNSEL FOR THE DEBTOR

Louis R. Strubeck, Jr.


Liz Boydston


Norton Rose Fulbright US LLP

2200 Ross Avenue, Suite 2600

Dallas, Texas 75201



[email protected]

[email protected]

COUNSEL FOR EL PASO COUNTY HOSPITAL DISTRICT D/B/A UNIVERSITY

MEDICAL CENTER OF EL PASO

13889662v.1 145048/00008

15-30784-hcm Doc#127-2 Filed 07/02/15 Entered 07/02/15 17:14:50 Proposed Order Pg 2 of 2

TEXAS TECH UNIVERSITY

4800 ALBERTA

EL PASO, TX 79905

MEDASSETS, INC.

P.O. BOX 405652

ATLANTA, GA 30384-5652

CARDINAL HLTH MED PROD & SVC

P.O. BOX 730112

DALLAS, TX 75373-0112

AMERISOURCE BERGEN DRUG CORP.

P.O. BOX 100741

PASADENA, CA 91189-0741

ACCREDO HEALTH GROUP, INC.

P.O. BOX 906027

CHARLOTTE, NC 28290-6027

CHILDREN'S HOSPITAL ASSOC. TX

823 CONGRESS AVE., SUITE 1500

AUSTIN, TX 78701-2405

HILL ROM

P.O. BOX 643592

PITTSBURGH, PA 15264-3592

PROLACTA BIOSCIENCE, INC.

757 BALDWIN PARK BLVD.

ATTN: ACCOUNTS RECEIVABLE

CITY OF INDUSTRY, CA 91746

ABBOTT LABS

P.O. BOX 100997

ATLANTA, GA 30384

DEPT OF HEALTH & HUMAN SER

HHSC - ARTS

P.O. BOX 149055

AUSTIN, TX 78714-9055

NOVA BIOMEDICAL CORP.

P.O. BOX 983115

BOSTON, MA 02298-3115

INO THERAPEUTICS, LLC

P.O. BOX 9001

53 FRONTAGE RD., 3RD FLOOR

HAMPTON, NJ 08827-9001

CERNER CORPORATION

P.O. BOX 412702

KANSAS CITY, MO 64141-2702

BUNNELL INCORPORATED

436 SOUTH LAWNDALE DR.

SALT LAKE CITY, UT 84115

PASO DEL NORTE HIE

221 N. KANSAS ST., STE. 1900

EL PASO, TX 79901

JOHNSON & JOHNSON/ETHICON

5972 COLLECTIONS CENTER

CHICAGO, IL 60693

INTEGRA LIFESCIENCES SALES LLC

P.O. BOX 404129

ATLANTA, GA 30384-4129

STAPLES ADVANTAGE

DEPT DAL

P.O. BOX 83689

CHICAGO, IL 60696-3689

TMHP FINANCIAL DEPARTMENT

12357-B RIATA TRACE PKWY

SUITE 100

AUSTIN, TX 78727

SMITH AND NEPHEW, INC.

P.O. BOX 951605

DALLAS, TX 75395-1605

BECKMAN COULTER, INC.

DEPT CH 10164

PALATINE, IL 60055-0164

FEDERAL REPUBLIC OF GERMANY

OFFICE OF DEFENSE ADMIN.

11150 SUNRISE VALLEY DR.

RESTON, VA 20191

KLS MARTIN L P

P.O. BOX 204322

DALLAS, TX 75320-4322

ABBOTT NUTRITION

75 REMITTANCE DR., STE 1310


VAPOTHERM, INC.

22 INDUSTRIAL DRIVE

EXETER, NH 03833

SUPERIOR HEALTH

P.O. BOX 3000

FARMINGTON, MO 63640

AETNA US HEALTHCARE

P.O. BOX 14079

LEXINGTON, KY 40512

15-30784-hcm Doc#127-3 Filed 07/02/15 Entered 07/02/15 17:14:50 Service List Pg 1 of 2

BIOMET MICROFIXATION

75 REMITTANCE DR.

SUITE 3283


GULF COAST PHARMACEUTICAL PLU

P.O. BOX 6704

GREENVILLE, SC 29606

SUTURE EXPRESS

P.O. BOX 842806

KANSAS CITY, MO 64184-2806

UMC OF EL PASO

4815 ALAMEDA AVE.

EL PASO, TX 79905

CHRISTOPHER A. WARD

POLSINELLI PC

222 DELAWARE AVENUE, SUITE 1101

WILMINGTON, DE 19801

JAMES H. BILLINGSLEY

POLSINELLI, PC

2501 N HARDWOOD, SUITE 1900

DALLAS, TEXAS 75201

STRYKER ORTHOPAEDICS

PURKEY & ASSOCIATES

5050 CASCADE RD., SE, SUITE A

GRAND RAPIDS, MI 49546

UNITED STATES TRUSTEE

KEVIN EPSTEIN, TRIAL ATTORNEY

615 E HOUSTON STREET, ROOM 533

SAN ANTONIO, TEXAS 78205

INTERNAL REVENUE SERVICE

CENTRALIZED INSOLVENCY OFFICE

PO BOX 7346

PHILADELPHIA, PA 19101-7346

UNITED STATES ATTORNEY

700 E SAN ANTONIO, SUITE 200

EL PASO, TEXAS 79901

UNITED STATES ATTORNEY

GENERAL

DEPARTMENT OF JUSTICE

950 PENNSYLVANIA AVENUE NW

WASHINGTON, D.C. 20530

TEXAS COMPTROLLER OF PUBLIC

ACCOUNTS

REVENUE ACCOUNTING DIVISION –

BANKRUPTCY SECTION

PO BOX 13258

AUSTIN, TEXAS 78711

TEXAS WORKFORCE COMMISSION

TEC BUILDING – BANKRUPTCY

101 E. 15TH STREET

AUSTIN, TEXAS 78778

HAL F. MORRIS

ASHLEY F. BARTRAM

CHRISTOPHER S. MURPHY

TEXAS ATTORNEY GENERAL’S OFFICE

BANKRUPTCY & COLLECTIONS DIVISION

PO BOX 12548 – MC 008

AUSTIN, TEXAS 78711-2548

LOUIS R. STRUBECK, JR.

ELIZABETH N. BOYDSTON

NORTON ROSE FULBRIGHT US LLP

2200 ROSS AVENUE, SUITE 3600

DALLAS, TEXAS 75201

Kimberly A. Walsh, Esq.

Sherri K. Simpson, Paralegal

Attorney General’s Office

Bankruptcy & Collections Division

PO Box 12548

Austin, Texas 78711-2548

Morton R. Branzburg, Esquire

Klehr | Harrison | Harvey | Branzburg,

LLP

1835 Market Street, Suite 1400

Philadelphia, PA 19103

Robert A. Simon

Whitake Chalk Swindle & Schwartz, PLLC

301 Commerce Street, Suite 2500

Fort Worth, Texas 76102

Catherine A. Keith

Darrell W. Cook & Associates

A Professional Corporation

One Meadows Building

5005 Greenville Avenue, Suite 200

Dallas, Texas 75206

County of El Paso

c/o Wiley James, III

James & Haugland, P.C.

609 Montana Ave.

El Paso, Texas 79902

13432185v.1 145048/00008

15-30784-hcm Doc#127-3 Filed 07/02/15 Entered 07/02/15 17:14:50 Service List Pg 2 of 2

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