In a controversial decision, the bankruptcy judge for Quorum Health, which filed for protection on April 7, is tentatively setting an exit by May 22. However, that could change if a committee of equity holders is formed and challenges that timetable.
If this timetable is adhered to, we’ll be learning sooner rather than later what happens to the $17.6mn of BDC exposure at cost summarized in our prior article. Based on the latest valuations of the first lien and second lien debt held, we expect a (20%) and (65%) discount respectively. That represents a possible ($8mn) realized loss and an incremental ($6.5mn) more than at December 31, 2019.