In Re Verity Health System of California, Inc.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CV 20-7632 DSF

In re VERITY HEALTH SYSTEM OF CALIFORNIA, INC., et al., OPINION Debtors.

Appellant Strategic Global Management, Inc. (SGM) appeals the Bankruptcy Court’s approval of the Chapter 11 liquidation plan (Plan) for the various debtor entities related to Verity Health System of California, Inc. SGM had entered into a post-petition contract to purchase several Verity owned hospitals, but the transaction fell through. This failure to close the transaction prompted an adversarial action between the parties where, in addition to claims by the Debtors against SGM, SGM seeks to recover its $30 million deposit, plus interest and fees that it estimates at an additional $15 million. The adversarial action is currently pending before this Court. SGM claims that the Bankruptcy Court erred in approving the Plan because (1) the Plan violates 11 U.S.C. § 1129(a)(9) by failing to pay all administrative claims before paying lower priority claims, (2) the Bankruptcy Court had no authority to estimate SGM’s administrative claim, (3) the Plan limits funding for any future allowed administrative claims while nonetheless paying…