Integrated Healthcare Holdings Inc (fka IHCH)

[dannol48]

7 Cent Buyout Update

I'm trying to get some updates on the QAF approval status and how the new fee rates and payments will effect the debt paydown over the next year toward the April 2013 expiration on the bankruptcy debt restructure warrants. The final buyout at 7 cents with the 7 cent warrants is based upon the paydown (IMO) from the current $65 Million. I think that's the go/no-go point for whether Chaudhuri and Silver Point take-over with his final buyout of the remaining OS at 7 (per Chaudhuri 13D filing), or whether he pays less against some assumption of debt (more than anticipated when the deal was made in April 2010). My gut guess is 3 cents as a floor, due to his last two purchases. The big jump in operating costs with admissions declining does make it a problem (IMO) to get sufficient debt reduction.

The DHCS website does not currently show payment approvals. That may suggest CMS hasn't approved and that would mean a major cashflow problem for IHCH to pay the fees with no incoming payments. I'm making inquiries and will provide an update to the QAF DD series when I can get some reliable info. Note, they gave no update in the last report on QAF past last June 30, which is a suggestion that payments aren't approved.