QUORUM HEALTH CORPORATION Item 1.01 Entry into a Material Definitive Agreement.
Exit ABL Credit Agreement
On the Effective Date, pursuant to the Plan,
The Exit ABL Credit Agreement provides for an asset-based revolving loan
facility in the maximum principal amount of
The Exit ABL Facility bears interest at a rate per annum equal to the sum of
(i) the
Item 1.02 Termination of a Material Definitive Agreement.
Equity Interests
On the Effective Date, by operation of the Plan, all agreements, instruments, and other documents evidencing, relating to or connected with any equity interests of QHC, including the existing common stock, restricted stock, and restricted stock units issued and outstanding immediately prior to the Effective Date, and any rights of any holder in respect thereof, were deemed cancelled, discharged and of no force or effect.
Employment Agreements and Change in Control Severance Agreements
In connection with the Company's emergence from the Chapter 11 Cases, the
Company intends to reject the employment agreements and change in control
severance agreements that QHC had previously entered into with certain of its
executive officers and other senior management, and such agreements will be
cancelled and terminated.
DIP Credit Agreement
On the Effective Date, the Superpriority Secured Debtor-in-Possession Credit
Agreement, dated as of
Senior Notes and Credit Agreements
On the Effective Date, by operation of the Plan, all outstanding obligations under each of the following debt instruments were cancelled and the applicable agreements governing such obligations were terminated:
• Term Loan Agreement with respect to the Term Loan Facility and
Revolving Credit Facility;
• ABL Credit Agreement with respect to the ABL Facility; and
• $400 million in aggregate principal amount of 11.625% Senior Notes due
2023 (the "Senior Notes") issued by QHC pursuant to that certain
Indenture, dated as of April 22, 2016 , by and between QHC and
Wilmington Savings Fund Society , FSB, as successor trustee to Regions
Bank .
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Item 1.03 Bankruptcy or Receivership.
As disclosed above, on
Summary of Material Features of the Plan
The following is a summary of the material terms of the Plan. This summary highlights only certain substantive provisions of the Plan and is not intended to be a complete description of the Plan. This summary is qualified in its entirety by reference to the full text of the Confirmation Order and the Plan, which are attached hereto as Exhibits 99.1 and 2.1 to this Current Report on Form 8-K, respectively, and are incorporated herein by reference.
Treatment of Claims and Interest under the Plan
As discussed in further detail in the Plan, the Plan provides for, among other things, the following treatment of claims against and interests in the Company:
• each holder of a claim arising under (i) the DIP Facility advanced to
the Company or (ii) the DIP Claims will be paid in full in cash on the
Effective Date;
• any reasonable and documented expenses incurred by the DIP Agent in
connection with the DIP Facility will be paid in full in cash on the
Effective Date;
• the DIP Facility, the DIP Credit Agreement, and all related loan
documents will be deemed cancelled and all liens arising under the DIP
Facility will automatically terminate;
• each holder of an administrative expense, priority tax, or other
priority claim will receive payment in full in cash;
• each holder of a claim arising under the ABL Credit Facility will be
paid in full in cash on the Effective Date from the proceeds of the
Exit ABL Facility;
• each holder of a claim arising under the Term Loan Facility will
receive its pro rata share of: (i) $50 million in cash, and (ii) the
Exit Facility;
• each holder of a claim arising under the Revolving Credit Facility
will receive its pro rata share of (i) cash in the amount of (A) the
aggregate principal amount outstanding of the Revolving Credit
Facility, multiplied by (B) a ratio equal to (x) the cash paid to
holders of claims arising under the Term Loan Facility divided by
(y) the aggregate principal amount outstanding under the Term Loan
Facility; and (ii) the Exit Facility;
. . .
Item 2.03 Creation of Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 regarding the Exit ABL Facility, Exit Facility, Exit ABL Credit Agreement, and Exit Term Loan Agreement is incorporated by reference into this Item 2.03.
Item 3.02 Unregistered Sales of
On the Effective Date, pursuant to the Plan,
In addition, on the Effective Date, pursuant to the Plan, 3,913,818 Class A
Units of
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Item 3.03 Material Modification to the Rights of Security Holders.
The information set forth under the Introductory Note and Items 1.01, 1.02, 1.03, 5.01 and 5.03 of this Current Report on Form 8-K is incorporated herein by reference.
Item 5.01 Changes in Control of Registrant.
On the Effective Date, pursuant to the Plan, QHC became a wholly owned
subsidiary of
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Appointment of Managers and Officers of
As the ultimate parent of QHC,
Departure of Directors of QHC
On the Effective Date, pursuant to the Plan,
Appointment of Directors of QHC
On the Effective Date,
Departure of Officer of QHC
As of the Effective Date,
In connection with his resignation, on the Effective Date, QHC entered into a
Separation Letter Agreement (the "Separation Agreement") with
The foregoing is only a summary of the Separation Agreement with
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Appointment of Officers of QHC
As of the Effective Date,
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On the Effective Date, in connection with QHC's implementation of the Plan, the
Amended Certificate and Amended By-Laws were adopted and approved, and the
Amended Certificate was filed with the
Item 7.01 Regulation FD Disclosure.
Suspension of SEC Reporting Obligations
QHC intends to file post-effective amendments to each of its Registration
Statements on Form S-8 and a Form 15 with the
Press Release
On
Cleansing Material
The Company is a party to certain confidentiality agreements (collectively, the
"NDAs") entered into with certain creditors (the "Consenting Stakeholders")
party to that certain Restructuring Support Agreement, dated
The descriptions in this Form 8-K of the Cleansing Material do not purport to be complete and are qualified in their entirety by reference to the complete presentation of the Cleansing Material attached as Exhibit 99.3 hereto.
The information set forth in Item 7.01 of this Form 8-K is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of such section. The information in Item 7.01 of this Form 8-K shall not be incorporated by reference into any filing under the Securities Act or the Exchange Act, regardless of any incorporation by reference language in any such filing.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, included in this filing that address activities, events or developments that the Company expects, believes, targets or anticipates will or may
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occur in the future are forward-looking statements. The Company's actual results
may differ materially from those anticipated in these forward-looking statements
as a result of certain risks and other factors, which could include the
following: risks and uncertainties relating to the Chapter 11 Cases, including
but not limited to, the Company's ability to implement the Plan effectively; the
effects of the Chapter 11 Cases on the Company and on the interests of various
constituents; the length of time the Company will continue to operate under the
supervision of the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
No. Description
2.1 Debtors' Joint Prepackaged Chapter 11 Plan of Reorganization, dated as
of April 7, 2020 , as amended or supplemented on April 27, 2020 , June 5,
2020 , June 12, 2020 , and June 30, 2020
3.1 Second Amended and Restated Certificate of Incorporation of QHC
3.2 Second Amended and Restated By-Laws of QHC
10.1 Credit Agreement and Guaranty, dated July 7, 2020 , among the ABL
Borrowers, the ABL Guarantors, the ABL Agent, as a lender and the
collateral agent, and the lenders party thereto
10.2 Credit Agreement, dated July 7, 2020 , among the Term Loan Borrower, the
Term Loan Guarantors, the Term Loan Agent, and the lenders party thereto
10.3 Separation Letter Agreement, dated July 7, 2020 , by and between QHC and
Robert H. Fish
99.1 Findings of Fact, Conclusions of Law, and Order Approving the Debtors'
Disclosure Statement for, and Confirming, the Debtors' Joint Prepackaged
Chapter 11 Plan of Reorganization, dated June 30, 2020
99.2 Press Release
99.3 Cleansing Material
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