Atlantic Neurosurgical Specialists, P.A. and affiliates filed chapter 11 cases in the District of New Jersey in mid-2024 after a financing-and-governance dispute tied to a KeyBank-backed investment chain and an alleged management-fee payment stoppage that escalated into receivership activity. The cases involved a multi-entity structure connected to Altair Health and Lorient Capital. The chapter 11 resulted in a section 363 sale of Hanover Hills Surgery Center's assets—including regulatory/license rights and the facility lease—to AOP Holdings, LLC for $3.0 million, followed by a confirmed joint plan of liquidation implemented through a liquidation trust. A $2.8 million shareholder settlement funded capped distributions to general unsecured creditors while KeyBank retained priority to remaining assets.
Atlantic Neurosurgical Specialists, P.A.; ANS Newco, LLC; Hanover Hills Surgery Center LLC
Court
U.S. Bankruptcy Court for the District of New Jersey
Petition Dates
June 5, 2024 (ANS and ANS Newco); July 12, 2024 (Hanover Hills)
Case Numbers
24-15726; 24-15727; 24-16995
Sale Buyer
AOP Holdings, LLC
Sale Price
$3.0 million cash (subject to adjustment)
Key Sale Assets
Facility lease + NJ ambulatory care center license (no. 24260)
Sale Order
October 18, 2024
Confirmation Order
February 26, 2025
Plan Effective Date
March 24, 2025
Liquidation Trustee
Jay L. Lubetkin (ANS Liquidation Trust)
Case Snapshot
Company Background
Atlantic NeuroSurgical Specialists is a New Jersey practice founded in 1958 that provides neurosurgical and neurovascular services, with a regional footprint anchored in Morristown (practice profile; PitchBook profile). The case also includes Hanover Hills Surgery Center, an ambulatory surgery center in Florham Park, New Jersey with five operating rooms and a Medicare-certified profile (NPI profile; U.S. News ASC page).
The Combined Plan and Disclosure Statement describes a 2017 transaction in which CIA purchased a 40% interest in ANS Continuum for approximately $33 million plus a $6 million subordinated promissory note distributed to ANS founders. CIA borrowed $35 million from KeyBank to fund the purchase, with the loan guaranteed by ANS Continuum. Filings also describe an additional KeyBank loan in 2019 that funded a surgery center acquisition through a Florham Park entity owned by ANS Continuum.
In October 2022, the ANS debtors allegedly stopped paying management fees to ANS Continuum, which filings describe as causing CIA to stop making payments to KeyBank. By April 2024, KeyBank pursued receiver relief.
Date
Event
2017
CIA purchases 40% of ANS Continuum; KeyBank loan funds investment
The plan and disclosure statement describes approximately $6.0 million of assets and $22.6 million of unsecured liabilities for ANS, and de minimis assets with over $20.6 million of unsecured claims for ANS Newco. KeyBank asserted a secured claim in Hanover Hills of approximately $29.3 million and approximately $20 million in accrued or unpaid management fees owed by ANS to ANS Continuum.
Item
Amount
ANS petition-date assets
$6,026,030
ANS petition-date unsecured liabilities
$22,568,480
ANS Newco petition-date assets
$4,626
ANS Newco petition-date unsecured claims
$20,618,892
KeyBank asserted secured claim (Hanover Hills)
$29,257,747
KeyBank asserted unpaid management fees
~$20,000,000
Petition-Date Financial Snapshot
Postpetition Financing
The case used an intercompany DIP structure: ANS entities provided postpetition funding to Hanover Hills. The Intercompany DIP Motion describes an interest-free DIP capped at $270,000 with a term ending no later than the earlier of the Hanover Hills asset sale/closing or mid-November 2024. The funds covered administrative and ordinary-course operating expenses. The intercompany DIP was an administrative claim carved out of net sale proceeds and payable ahead of any payment to KeyBank.
Term
Details
Lender
ANS debtors (ANS and ANS Newco)
Borrower
Hanover Hills Surgery Center LLC
Cap
Up to $270,000
Interest
None (interest-free)
Use of proceeds
Administrative and ordinary-course operating costs under forecast
Repayment priority
Carved out of net sale proceeds ahead of KeyBank
Intercompany DIP Terms
Sale Process
The Bidding Procedures Order set a stalking horse identification deadline in mid-September, a bid deadline in late September, an auction date at the end of September (if competing qualified bids existed), and a sale hearing in early October. The sale closing was keyed to receipt of governmental or regulatory approval to acquire the facility license, with a seven-day window after approval for closing. Bid protections included a breakup fee capped at 3% of the stalking horse bid and an expense reimbursement component.
Sale milestone
Date / time (ET)
Stalking horse identification deadline
September 13, 2024 (5:00 p.m.)
Bid deadline
September 27, 2024 (5:00 p.m.)
Auction (if competing qualified bids)
September 30, 2024 (10:00 a.m.)
Sale objection deadline
October 4, 2024 (5:00 p.m.)
Replies to objections
October 7, 2024
Sale hearing
October 8, 2024 (10:00 a.m.)
Sale Process Schedule
The Sale Order approved the sale of substantially all Hanover Hills assets to AOP Holdings, LLC for $3.0 million cash (subject to adjustment), with good faith purchaser protections under section 363(m) and "free and clear" findings under section 363(f). The order addressed the assumption and assignment of the facility lease and the New Jersey ambulatory care center facility license (license number 24260). The purchaser had 30 days to designate which contracts and leases it wanted assumed and assigned; items not designated were deemed rejected.
Plan of Liquidation
After the sale, the cases moved to a joint plan of liquidation confirmed on February 26, 2025. The Confirmation Order approved the Amended Combined Plan, which created a liquidation trust, appointed Jay L. Lubetkin as liquidation trustee, and set post-effective mechanisms for claims reconciliation and distributions.
The plan imposed capped distributions for general unsecured creditors:
Non-KeyBank general unsecured creditors of the ANS entities received a 10% distribution capped at $200,000 in the aggregate, plus a pro rata share of 10% of certain net recoveries from a D&O liability insurance policy.
Hanover Hills general unsecured creditors received a 10% distribution capped at $15,000 in the aggregate, plus a pro rata share of 10% of certain D&O net recoveries.
KeyBank retained priority to remaining assets after payment of administrative, professional, and priority claims and the capped unsecured distributions.
Creditor Group
Treatment
Cap
Non-KeyBank GUCs (ANS debtors)
10% distribution + D&O net recovery sharing
$200,000 aggregate
GUCs (Hanover Hills)
10% distribution + D&O net recovery sharing
$15,000 aggregate
KeyBank
Priority to remaining assets after caps and higher priority claims
Residual value
Unsecured Creditor Treatment
Settlement funding. The plan incorporated a $2.8 million settlement contribution funded by six settling shareholders, allocated 50/50 between the estates and KeyBank, with a $1.4 million distribution to KeyBank on the effective date. Four physicians contributed $500,000 each and two individuals contributed $400,000 each.
Item
Amount
Allocation
Settling shareholder contribution
$2,800,000
50% to estates / 50% to KeyBank
KeyBank effective-date distribution
$1,400,000
Paid on effective date
Settlement Funding
The plan's effective date occurred on March 24, 2025, per the Notice of Effective Date, with a professional fee bar date of April 23, 2025 (30 days after the effective date).
Professional Retentions
Professional
Role
Fox Rothschild LLP
Debtor counsel (Hanover Hills)
Faegre Drinker Biddle & Reath LLP
Committee counsel
Epstein Becker & Green, P.C.
Special counsel (ANS)
Epiq Corporate Restructuring, LLC
Solicitation/balloting agent
Professional Retentions
Key Timeline
Date
Milestone
June 5, 2024
ANS and ANS Newco petitions filed
July 12, 2024
Hanover Hills petition filed
Aug 23, 2024
Bidding procedures order entered
Oct 18, 2024
Sale order entered (AOP Holdings)
Feb 26, 2025
Confirmation order entered
Mar 24, 2025
Plan effective date occurred
Frequently Asked Questions
When did Atlantic Neurosurgical Specialists file chapter 11, and in what court?
Atlantic Neurosurgical Specialists, P.A. and ANS Newco filed chapter 11 petitions on June 5, 2024, and Hanover Hills Surgery Center LLC filed on July 12, 2024, in the U.S. Bankruptcy Court for the District of New Jersey. The cases were jointly administered in New Jersey.
Which debtor entities were included in the jointly administered cases?
The jointly administered cases covered Atlantic Neurosurgical Specialists, P.A., ANS Newco, LLC, and Hanover Hills Surgery Center LLC.
What were the key drivers of distress described in bankruptcy filings?
The plan/disclosure statement describes a financing chain tied to a 2017 investor transaction and KeyBank loans, followed by disputes over management-fee payments and a receiver action that preceded the chapter 11 filings. In that narrative, the fee-payment stoppage and downstream loan-payment consequences were central to the insolvency path.
What was the Hanover Hills intercompany DIP and why did it matter to the sale process?
The cases used an interest-free intercompany DIP from the ANS entities to Hanover Hills to fund operating and administrative expenses while the sale process ran. Filings describe the intercompany DIP being repayable from net sale proceeds ahead of KeyBank, which mattered because it preserved near-term liquidity and protected sale value in a regulated facility business.
What assets were sold through the 363 process and what was the sale price?
The sale order approved a $3.0 million cash sale of substantially all Hanover Hills assets to AOP Holdings, LLC, including assignment mechanics for the facility lease and the ambulatory surgery center license.
How did the confirmed liquidation plan treat general unsecured creditors?
The plan provided capped 10% distributions for general unsecured creditor classes, with an aggregate cap of $200,000 for non-KeyBank unsecured creditors of the ANS entities and $15,000 for Hanover Hills unsecured creditors, along with a shared right to a portion of D&O insurance net recoveries under the plan’s framework.
What was the role of the settling shareholder contribution?
The plan incorporated a $2.8 million settlement contribution funded by certain shareholders and allocated between the estates and KeyBank, providing “fresh cash” to support confirmation and implement the plan’s distribution and release framework.
When did the plan become effective and who served as liquidation trustee?
The effective date was March 24, 2025, and post-confirmation orders identify Jay L. Lubetkin as the liquidation trustee for the ANS Liquidation Trust.
Read more chapter 11 case research on the ElevenFlo blog.
Sources
Combined Plan and Disclosure Statement /documents/3d29566e-9bdb-4c5d-b89b-a8fd7e943a07/
57 filings in 2024 https://www.medicaleconomics.com/view/2024-health-care-bankruptcies-down-from-2023-but-still-greater-than-recent-average
rose to 10 filings in 2024 https://radiologybusiness.com/topics/healthcare-management/healthcare-economics/physician-practice-and-clinic-bankruptcy-filings-have-surged-60-year-over-year-2024
2.83% cut in the Medicare physician fee schedule https://www.techtarget.com/revcyclemanagement/news/366618355/Senior-care-physician-practices-hit-hard-by-bankruptcies
physician practice filings https://www.techtarget.com/revcyclemanagement/news/366619312/Private-equity-behind-large-healthcare-bankruptcies-in-2024
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.