May 28, 2013
A Delaware bankruptcy judge signed off on a proposed settlement Tuesday between LifeCare Holdings Inc.'s creditors committee and its private equity purchaser, removing the final obstacle to hospital group's $320 million sale to The Carlyle Group LP.
June 5, 2013
LifeCare Holdings Inc. urged a Delaware bankruptcy judge Tuesday to ignore the federal government's attempt to block proceeds from the hospital chain's $320 million sale to Carlyle Group LP from being paid, arguing the U.S. is wrong about who actually owns the money.
The Carlyle Group lost LifeCare to bankruptcy, as a result of loading the company with debt, then choosing to default on their loans. The "sale" is a transfer of assets to debt holders, with no cash changing hands. The $320 million valuation is part fiction, likely needed to keep LifeCare's Medicare capital cost reimbursement from imploding.
While Carlyle was happy to take Uncle Sam's money for services, it wasn't much for paying taxes. LifeCare owes the federal government $24 million, an issue in LifeCare's bankruptcy settlement.
What if Law360 is right and The Carlyle Group asset holder is selling to The Carlyle Group debt holder in a Byzantine deal? If so, we're down the PEU rabbit hole. My guess is it's a reporting error.
To confirm my suspicion I sought the original bankruptcy documents from the Delaware Bankruptcy Court. Public access included a charge of $10 per page to view their documents. While PEUReport remains free of advertising or charges, it's becoming more difficult to access information hidden behind pay walls. That said, I'll do my best to find answers to my questions.
