August 2, 2011 NOTICE REGARDING FINAL DISTRIBUTION ON BONDS

Transcription

1 To the Holders of: NOTICE REGARDING FINAL DISTRIBUTION ON BONDS $ COUNTY OF TUSCARAWAS, OHIO HOSPITAL FACILITIES REVENUE BONDS, SERIES 2007 (TWIN CITY HOSPITAL PROJECT) CUSIP NUMBERS 1 19O0687BJ BL 7 19O0687BK9 PLEASE FORWARD THIS TO BENEFICIAL HOLDERS. THIS NOTICE CONTAINS IMPORTANT INFORMATION THAT IS OF INTEREST THE REGISTERED AND BENEFICIAL OWNERS OF INTERESTS DESIGNATED BY THE CUSIPS LISTED ABOVE. IF APPLICABLE, ALL DEPOSITORIES, CUSTODIANS, AND OTHER INTERMEDIARIES RECEIVING THIS NOTICE ARE REQUESTED TO EXPEDITE RE-TRANSMITTAL TO BENEFICIAL OWNERS OF INTERESTS DESIGNATED BY THE CUSIPS IN A TIMELY MANNER. Wells Fargo Bank, National Association, acts as successor trustee (the "Trustee ), with respect to the Bonds bearing the CUSIP numbers which appear above (the "Bonds ). The Bonds were authorized and issued under an Indenture of Trust (the "Indenture ) with the County of Tuscarawas, Ohio dated as of September 1, The proceeds of the Bonds were loaned to Twin City Hospital Corporation (the "Borrower" or "Debtor ), evidenced by a Series 2007 Note given by the Borrower dated as of September On June 11, 2010, the prior trustee named in the Indenture gave notice of the occurrence of an Event of Default under the Indenture and the Series 2007 Note. The Borrower operated a small acute care hospital in Dennison, Ohio. 1 CUSIP numbers are provided for convenience of reference only. The Trustee shall not be responsible for the selection or use of CUSIP numbers.

2 Page 2 SALE OF TWIN CITY HOSPITAL As set forth in prior notices to holders of Bonds and as discussed during various public bondholder calls, the Debtor filed bankruptcy under Chapter 11 of the Bankruptcy Code on October 13, As part of its bankruptcy case, the Debtor filed a motion (the "Sale Motion to sell substantially all of its assets (the "Assets ) associated with Twin City Hospital free and clear of all liens, claims, interest, and encumbrances to Trinity Hospital Twin City ("Trinity" The Debtor entered into an asset purchase agreement with Trinity as its "stalking horse bidder to purchase the Assets at a purchase price of $ , subject to certain price adjustments. The sale to Trinity was approved by the Bankruptcy Court on May 9, 2011, and the transaction closed on May 9, 2011, and funds in the aggregate amount of $ were transferred to the Indenture Trustee. In addition to such funds paid to the Indenture Trustee, the Sale Order required the Debtor to establish an escrow account in the amount of $917, 127 for payment of estimated carve-out amounts and post-closing purchase price adjustments, if any (the "Sale Escrow ). To the extent there were funds remaining in the Sale Escrow after payment of such allowed carve-out amounts and any purchase price adjustments, the funds in the Sale Escrow were be remitted to the Indenture Trustee on account of the Series 2007 Note obligations as provided in the Sale Order. As a result of the settlement of claims to the Sale Escrow, the Trustee received a remittance from the Debtor and Trinity on July 28, 2011, in the amount of $ The Indenture Trustee gave notice in May, 2011, that it intended to make a distribution to holders of the Bonds upon receipt of funds made available after litigation between the Debtor and certain former employees of the Debtor conceming a "top hat" deferred compensation plan (the "457(b) Funds ). The Court held a hearing concerning entitlement to the 457(b) Funds in May, The Court entered an order resolving the litigation on July 21, 2011, in which the Court concluded that the 457(b) Funds were not part of the Debtor s bankruptcy estate and need not be paid to the Indenture Trustee for distribution to the holders of the Bonds. The Trustee has set aside $ (the "Short Term Holdback") to pay remaining unbilled attorney s fees incurred in efforts to negotiate a workout arrangement and sale of the hospital facility outside of bankruptcy, as well as for representation in the bankruptcy case. The Short Term Holdback was set to include an amount the Trustee deems sufficient to seek reconsideration of the court' s order pertaining to the 457(b) Funds. Out of the total funds in the trust estate of $3, , the Trustee is therefore prepared to distribute $ at this time, which consists of all funds less the Short Term Holdback. The Trustee will distribute the net amount remaining of the Short Term Holdback to the extent there are funds available after payment of attomey s fees and costs along with any recovery of the 457(b) Funds, if the Court agrees to reconsider its previous order. Except for potential recovery on account ofd&o Claims and the possible net Short Term Holdback, there do not appear to be other sources of recovery for holders of the Bonds on account of the Series 2007 Note obligations.

3 Page 3 DISTRIBUTION TO HOLDERS OF THE BONDS The Trustee is now prepared to establish a record date for distribution of the funds held by the Trustee, net of the Short Term Holdback. The special record date for the distribution shall be August Under Section 705(a) of the Indenture, distributions by the Trustee are applied to interest before principal, after all fees and costs of the Trustee s remedial actions. The distribution will be available to holders of the Bonds on and after August 5, The payment in the amount of $ represents a payment in full of all interest accrued and owed through August , with the balance applied to principal, and has been prorated as follows: CUSIP Interest owed Interest Principal Principal Principal and being paid as paid per owed being paid per $1000 of 8/3/11 $ BJ2 $ $ $ $ BK9 $ $ $ $ BL 7 $ $ $ Except for the distribution of the Short Term Holdback and any funds received as a result of reconsideration of the motion for recovery of the 457(b) Funds, this will be the FINAL distribution with respect to the Bonds. Interest will no longer accrue on the Bonds. When the Short Term Holdback and any recovery of the 457(b) Funds is distributed, it will be applied exclusively to outstanding unpaid principal. HOLDERS MUST SUBMIT THEIR BONDS IN ORDER TO RECEIVE THIS PRINCIPAL AND INTEREST DISTRIBUTION. THE BONDS WERE ISSUED IN ELECTRONIC FORMAT, AND WILL BE SURRENDERED ELECTRONICALLY BY SENDING THEM TO THE FOLLOWING ADDRESSES:

4 Page 4 IF BY REGISTERED OR CERTIFIED MAIL: Wells Fargo Bank, N. Corporate Trust Operations PO Box 1517-N Minneapolis, MN IF BY AIR COURIER: Wells Fargo Bank, N. Corporate Trust Operations- N th & Marquette Avenue Minneapolis, MN IF IN PERSON: Northstar East Building 608 2nd Avenue South 12th Floor- Corporate Trust Minneapolis, MN If you have any questions concerning your Bonds or the issues contained in this notice please contact the Successor Trustee at the following address: Wells Fargo Bank, National Association Virginia Anne Housum, Vice President MAC N Marquette Avenue, 11th Floor Minneapolis, Minnesota Virginia. AHousum(2V,wellsfargo. com Telephone: Fax: As more fully set forth in the Indenture, the holders of a majority in principal amount of the Bonds have the right to direct the actions of the Trustee under the Indenture. The Trustee may conclude that a specific response to particular inquiries from individual holders is not consistent with equal and full dissemination of significant information to all holders. Bondholders should not rely solely on the Trustee as their sole source of information. The Trustee makes no recommendations and gives no investment advice herein or as to the Bonds generally. WELLS FARGO BANK, National Association, as Trustee

5 ezdisclose Notice Proof Summary Report /03/2011 Client Name: Wells Fargo Bank, NA (CTS) Reliance: Notice Issuer: TUSCARAWAS CNTY OHIO HOSP FACS Issue Title: TWIN CITY HOSP PROJ Job Type: Redemption Issue Date: Pub Date: 08/02/2011 Call Type: Partial Call Date: 08/03/2011 Total Amt Called: $ Notice Memo: Customers: Notification Wells Fargo Bank, NA (CTS) O. Box 1517, Corp. Trust Oper. Minneapolis Mail- Delivery Address (0570) Issues: BK /01/ MU P N/A N/A N/A BJ /01/ MU P N/A N/A BK9 $ N/A BL /01/ MU P N/A N/A BJ2 $ N/A BL ezdisclose Notice Proof Summary Report Page