Daytop Chapter 11 Bankruptcy FAQ
FAQ’s for Daytop Vendors
Frequently Asked Questions
Which Daytop entities filed for Chapter 11?
Daytop Village Foundation, Incorporated and Daytop Village, Inc. filed for Chapter 11 of the U.S. Bankruptcy Code on April 5th, 2012.
Why did Daytop file for Chapter 11?
The Company was in negotiations with its senior lenders regarding the resolution of proceeds from the sale of its former corporate office. The Company sought sufficient proceeds to significantly reduce past due amounts and pay down its senior debt obligations while our senior lenders wanted the majority of the proceeds to be used to reduce its debt. Ultimately, the Company filed petitions for protection under Chapter 11 of the U.S. Bankruptcy Code to effectively reorganize these obligations while upholding its commitment to its patients with no impact in day-to-day operations or service delivery.
We are confident that we will be in a position to emerge from this proceeding before the end of the year with a properly restructured balance sheet more reflective of our operations.
Is Daytop going out of business?
Absolutely not. Chapter 11 is a legal mechanism for Court-supervised reorganization or restructuring of a company’s obligations. The purpose of Chapter 11 is to preserve and strengthen businesses so that they can compete successfully. On the contrary, not only do we expect to emerge from this process (and in a timely manner), but we plan to be even better positioned to continue as one of the premier substance abuse treatment provider in New York.
How does the filing impact amounts owed for services owed by Daytop before the filing?
Federal law prohibits payments for goods and services received before the filing until a plan of reorganization is accepted by the creditors and approved by the court.
Will you attempt to negotiate new terms now that you have filed for Chapter 11?
No. We will continue to purchase goods and services just as before, on the same terms and conditions as before. Like any responsible company, we will continue to evaluate and periodically negotiate our terms just as we did prior to the filing.
Why should I continue as a vendor doing business with Daytop now that you are in Chapter 11?
There are several reasons you should continue to do business with Daytop. First, goods and services received after the filing can and will be paid for in the ordinary course of business; in fact, the Bankruptcy Code gives priority status to such payments. Second, because of the priority status given to such post-petition claims, we may be one of the safest customers with which you can do business. Third, when we complete this process and emerge from Chapter 11, we will be positioned for growth. We are confident in our future, and we look forward to your continued support as we return to a growth-oriented organization.
How long before you come out of Chapter 11?
While it is impossible to predict exactly how long this process will take, our goal and expectation is to complete our plan and emerge from Chapter 11 before the end of the year.
Will current management remain in place?
Yes. The core management team that has guided and instilled our patient-centric values remains in place and committed to the future of the business. Daytop will continue to operate its business and serve patients without interruption, maintaining day-to-day operations in accordance with Chapter 11 provisions.
Couldn’t the turnaround of the Company have been completed outside of the Bankruptcy Court?
While we confronted and resolved the vast majority of issues head-on and resisted the temptation to seek protection under Chapter 11, it is now appropriate and prudent to utilize this mechanism. This coordinated action will protect our operations while we complete our restructuring initiatives, restoring the solid financial structure on which we can continue to serve our patients.
What steps are you taking to improve the Company?
We have already made considerable progress in reducing our operating expenses. We expect to continue these efforts during and long after this process.
Where did the Company file its petitions? What is the case number? Who is the judge?
The filing was made in U.S. Bankruptcy Court for the Southern District of New York in. The case number is 12-11436. The United States Bankruptcy Judge is the Honorable. Shelley C. Chapman.
Where should we send our invoices?
Please send your invoices to the following address to ensure it’s processed timely for payment as follows:
Attn: Accounts Payable
104 West 40th Street
New York, New York 10018
Who is the Company’s legal counsel? Can I have their address and phone number?
Lowenstein Sandler PC
1251 Avenue of the Americas
New York, New York 10020
Click here to see Press Release