Platinum Heights: Heights Hospital Plan Collapse in Chapter 11

Platinum Heights, LP filed chapter 11 on February 20, 2025 to protect the Heights Hospital property in Houston after tenant disruption and a failed sale-backed exit left the debtor back in a liquidity fight with its secured lender. The operative Disclosure Statement describes Platinum Heights as a landlord-owner rather than a hospital operator, with one primary asset at 1917 Ashland Street and a capital structure dominated by b1BANK's mortgage debt. That posture matters because the case is now less about a conventional operating turnaround than about whether a replacement transaction can clear the secured debt stack and preserve any value for junior constituencies.

The case already reached confirmation once. The court confirmed a plan on December 5, 2025, but the buyer tied to that path told the debtor in late December that the closing would not happen, prompting the debtor's Motion to Vacate Confirmation Order and a court order on March 6, 2026 vacating the earlier confirmation order. The same day, the court entered a combined scheduling order that reset the case around a second plan, a fresh solicitation process, and an April 15, 2026 combined disclosure statement and confirmation hearing.

Debtor(s)	Platinum Heights, LP
Court	U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number	25-90012
Petition Date	February 20, 2025
Judge	Hon. Alfredo R. Perez
Primary Asset	Heights Hospital property, 1917 Ashland Street, Houston, Texas
Secured Lender	b1BANK
Confirmation Date	December 5, 2025
Current Posture	Prior confirmation order vacated on March 6, 2026; second plan and disclosure statement pending

Why the Confirmed Plan Collapsed

The debtor is a property owner, not the hospital operator. The Disclosure Statement says Platinum Heights owns the Heights Hospital real estate and acts as landlord, while affiliated operating tenants generated the rent stream that supported the property. North Houston Surgical Hospital occupied five of the building's six floors and paid about $4.8 million of rent in 2022 and $4.9 million in 2023 before becoming distressed and ceasing operations in June 2024. The same filing says PAM Health remained in the building, but that rent alone was not enough to support the debtor's obligations while replacement tenant Ashland Healthcare transitioned into the property without immediate rent payments.

That operating history helps explain why the case reached chapter 11 as what the debtor called a free-fall filing. The debtor said the shutdown of its main tenant and the mismatch between property-level expenses and reduced rent collections forced it into chapter 11 to stop a run on the asset and restructure around a sale or sponsor transaction.

The b1BANK proof of claim and the disclosure statement place the senior secured debt at $28,486,251.70 as of the petition date. The same disclosure statement says Platinum Heights also guaranteed obligations owed by affiliate PH SPE LLC to REILS Finance SPV, with petition-date exposure of about $17.039 million, and lists additional insider and affiliate debt from White Rock Medical Center, North Houston, and NCP. That stack left little room for error once rental income deteriorated and made the secured lender the fulcrum party in any sale or plan.

The first plan failed after the buyer walked away. The debtor's first plan was confirmed on December 5, 2025 and depended on a sale of the Heights Hospital asset to Strategic Plus Properties - Heights Healthcare, LLC. The Disclosure Statement says Strategic Plus told the debtor on December 17, 2025 that it needed more diligence time, then sent a December 24, 2025 letter stating that the acquisition agreement would not close and the effective date would not occur. That left the debtor with a confirmed plan but no closing and no path to consummation.

The debtor responded by seeking to unwind the prior confirmation and pivot into a new sponsor process. The Motion to Vacate Confirmation Order argued that continued enforcement of the December 2025 confirmation findings had become inequitable once the sale collapsed. Judge Perez granted that request in the March 6, 2026 vacatur order, clearing the way for a new plan and solicitation process.

The second plan resets the case around a sale or sponsor bid. The debtor filed its Second Plan and new Disclosure Statement on March 2, 2026. Those filings define b1BANK's allowed secured claim at $26.7 million for plan purposes, treat any remainder as a general unsecured claim, and contemplate a transaction structure that can be implemented either through a sale of substantially all assets or a sale of equity in the reorganized debtor to a new sponsor. Existing equity interests are cancelled on the effective date without any distribution.

The March 6 combined scheduling order sets April 7, 2026 as the voting and confirmation-objection deadline and April 15, 2026 as the combined hearing date. That means the key question in the case is no longer whether the debtor can preserve the old Strategic Plus deal; it is whether a new transaction can clear b1BANK's position and fund the plan waterfall on the court's revised schedule.

Cash Collateral, Stay Relief, and Sale Pressure

The secured lender pressed its leverage after the failed closing. b1BANK filed a Motion for Relief from Stay on January 16, 2026, asserting its lien on the six-story hospital property and pointing to unpaid taxes, force-placed insurance, and the failure of the first confirmed plan to reach an effective date. The motion said secured tax claims for 2023 through 2025 totaled more than $2.7 million and argued that the collateral should be freed for foreclosure or another lender-driven remedy if the debtor could not deliver a replacement restructuring path.

The debtor responded nine days later with a Second Cash Collateral Motion that framed continued cash collateral use as necessary to keep the property operating, preserve rent from PAM Health and Ashland Healthcare, and avoid administrative insolvency. That motion described principal and interest under the b1BANK note at $28,302,911.40 as of the petition date and proposed monthly adequate-protection payments of $191,134 together with replacement liens.

The dispute ended in a negotiated Final Cash Collateral Order entered on February 17, 2026. That order authorized continued cash collateral use subject to a 15% weekly variance, granted replacement liens, and provided that b1BANK would forgo contractual payments through April 30, 2026. It also approved a professional carve-out tied to sale value, ranging from $650,000 at a $20 million bid to $1.5 million for a bid of $28 million or more.

The budget showed how little room remained. The budget attached to the final order projected receipts mainly from PAM Health and Ashland Healthcare, cash balances falling as low as $7,451 in the week ending April 24, 2026, and a standing DIP advance balance of $605,000 through the budget period. Even with negotiated lender relief, the filings show a case running on limited rent collections, narrow cash balances, and lender-controlled collateral.

The lender also fought further exclusivity. In its combined objection, b1BANK argued that the emergency request for another extension of exclusivity came too late after the failed confirmed plan and did not justify prolonging the case around an undeveloped replacement concept. The fight resolved in the debtor's favor when the court entered the Third Exclusivity Order on February 17, 2026, extending plan exclusivity to March 24 and solicitation exclusivity to May 25. The next day, the court entered the Bidding Procedures Order giving b1BANK the right to credit bid up to $26.7 million and setting an April 9, 2026 auction in Dallas.

Operating Model and Property-Level Cash Flow

Court filings describe Platinum Heights as a landlord-owner whose business depends on keeping a specialized hospital property open and leased rather than generating diversified enterprise revenue. The Disclosure Statement says the debtor's two main prepetition tenants were North Houston Surgical Hospital and Curahealth Houston Heights d/b/a PAM Health Rehabilitation Hospital, and that North Houston's shutdown in June 2024 broke the rent profile that had supported the property. That left the debtor trying to carry a hospital campus with one remaining tenant, a transitioning replacement tenant, and a mortgage lender whose collateral included leases and rent proceeds.

The Final Cash Collateral Order and attached budget show why the operating model matters. Receipts were projected mainly from PAM Health and Ashland Healthcare, while utilities, HVAC costs, maintenance, and chapter 11 administrative expenses continued regardless of whether the building was fully stabilized. The budget reflects how quickly cash balances could fall when rent timing slipped or large utility and adequate-protection payments came due.

The same record also shows that Dr. Mirza Baig had already provided insider liquidity support. The Disclosure Statement says the debtor first sought unsecured DIP financing from Dr. Baig in February 2025, obtained interim relief on March 3, 2025 and final relief on March 24, 2025, then returned with a second DIP motion in June 2025 as the case progressed. By early 2026, the budget carried a $605,000 DIP advance balance, which underscores how long the property had been operating on negotiated lender consent and insider support rather than self-funding operations.

That combination of property-level expenses, insider bridge financing, and lender control over rents makes Platinum Heights a real estate workout wrapped in a healthcare setting. The building still needs hospital-grade utilities, maintenance, and tenant support, but the chapter 11 economics turn on who controls the collateral and whether a buyer or sponsor will pay enough to satisfy b1BANK and fund the plan structure.

Asset Profile: Heights Hospital Medical Building

The Heights Hospital property is a midrise medical professional building located at 1917 Ashland Street in Houston's Heights neighborhood. Market and local coverage consistently describe the facility as a six-story building of about 192,000 square feet on roughly 3.9 to 3.94 acres. In 2017, AMD Global and Medical Center Developments announced their purchase of the property and described it as a 192,077-square-foot, six-floor hospital on 3.94 acres, with St. Joseph Medical Center as an anchor tenant and a history of operation by Select Specialty Hospitals. Other coverage described the property as a 191,676-square-foot Class A medical office building, reflecting slight measurement differences across sources but a consistent scale and use profile.

The 2019 refinancing coverage illustrates how the asset has been framed as both a hospital campus and a medical office property. Madison Realty Capital's financing announcement and market reports referred to the asset as a Class A medical office building while still emphasizing its medical tenant base and hospital functions. Those characterizations suggest the property straddles hospital and medical office classifications, which may affect leasing decisions, operating costs, and capital requirements over time.

The property's tenant history and medical use are central to the bankruptcy because rent receipts from healthcare providers and the building's operating stability drive cash collateral availability. Historical reporting emphasized St. Joseph Medical Center's status as a long-term tenant and the property's role as a medical services hub, positioning the asset as specialized real estate that depends on healthcare tenant continuity.

Local reporting on the 2017 sale also cited a $12.1 million valuation from Houston property records and described the building as having been built in 1978 and remodeled in 2010.

Tenant and Service Mix at Heights Hospital

The Heights Hospital campus has been marketed as more than a typical office property. When AMD Global and Medical Center Developments announced their 2017 acquisition, they outlined plans to expand service lines that included labor and delivery, a neonatal intensive care unit, orthopedics, wound care, and pediatric offices, along with an on-site restaurant concept called West 19th Grille. Those plans framed the building as a multi-service medical campus rather than a single-tenant office location and help explain why operating costs such as utilities, HVAC, and maintenance appear prominently in the cash collateral budget.

Tenant mix and leasing levels are also visible in 2019 financing coverage. Market reports described the property as roughly 95% leased to medical tenants, with St. Joseph Medical Center and CuraHealth cited among the occupancy base, and noted that the loan collateral included nearby noncontiguous parking parcels. That leasing profile suggests the asset depended on a specialized medical tenant roster and supporting infrastructure, which can affect re-leasing timelines and capital requirements in a restructuring.

The operational footprint expanded again in 2022 when new owners reopened Heights Hospital as a full-service acute care community hospital. Reporting described a facility with five operating rooms, more than 40 inpatient beds, intensive care units, and a six-bay emergency room, indicating a return to comprehensive hospital services at the site. These service lines help explain the building's utility intensity and ongoing maintenance needs reflected in the debtor's short-term operating budget.

Ownership and Financing History Before Chapter 11

2017 acquisition and renovation push. In June 2017, AMD Global and Medical Center Developments announced their acquisition of the Heights Hospital property and described a significant renovation program. The buyers said major renovations were under way with anticipated completion in mid-September 2017 and outlined planned service expansions that included labor and delivery, a neonatal intensive care unit, orthopedics, and wound care, along with a proposed on-site restaurant. Industry and local coverage tied the facility to St. Joseph Medical Center as an anchor tenant and described the building as a six-floor medical facility in the Heights neighborhood. Those statements frame the asset as a renovated medical campus rather than a conventional office building, which may influence leasing, maintenance, and capital expenditure decisions.

Commercial property coverage also reported that AMD Global purchased the asset from Select Houston Partners LP and began upgrades immediately after the acquisition. That reporting reaffirmed the property's legacy as a Select Specialty-operated facility and positioned the 2017 renovations as a reset of the campus's medical positioning rather than a simple ownership change.

2019 refinancing and tenant profile. In January 2019, Madison Realty Capital announced a $28 million first-mortgage loan collateralized by a roughly 191,676-square-foot Class A medical office building at 1917 Ashland Street. The loan was described as refinancing prior debt and funding renovations and tenant improvements, and it was issued to a joint venture of Houston-based medical office development firms. Market coverage at the time reported the property was about 95% leased to medical tenants, including St. Joseph Medical Center and CuraHealth, and noted that the collateral package included nearby noncontiguous parcels used for parking. These details highlight a property-level financing structure that relied on stable medical tenancy and ancillary parking assets, factors that can affect valuation and lender strategy in a restructuring.

Financing context in broader market coverage. Industry publications described the Madison Realty Capital loan as part of a broader lineup of debt players in medical office financing, and they framed the Heights asset as a Class A medical office property requiring renovations and tenant improvements. University-based real estate reporting echoed the 2019 loan terms and underscored the property's leasing profile and tenant mix. The consistent reporting across press releases and industry outlets provides a record of the asset's financing history leading into the later credit stress.

Prepetition Disruptions and Operating Signals

2015 closure of Select Specialty operations. The Heights Hospital building has experienced operational transitions over the past decade. In May 2015, Select Specialty Hospital announced the Heights closure by July 2015, a decision that resulted in 222 employee layoffs. The closure also highlighted the site's relationship with St. Joseph Medical Center, which operated a satellite facility in the same building.

2021 lockout and unpaid rent dispute. In January 2021, local reporting described a lockout of staff and patients at the Heights Hospital building following a notice that locks had been changed and keys would be provided after payment of $461,302.24 in rent and fees. The report stated that the space was rented by 1917 Ashland Ventures LLC and that property records showed the building owned by 1917 Heights Hospital LLC. A follow-up report tied the lockout to a default on a $28 million construction loan by 1917 Heights Hospital, a subsidiary of AMD Global, and said the creditor was Arbitra Capital Partners, which hired a third-party management company to execute the lockout. The same report noted the loan was due at the end of 2020. These events point to earlier distress in the asset's capital structure and tenant relationships.

2022 reopening as an acute care facility. The Heights Hospital property reopened in February 2022 under new ownership as a full-service acute care community hospital. Reporting described a facility with five operating rooms, more than 40 inpatient beds, intensive care units, and a six-bay emergency room. The reopening indicated an attempt to reestablish full-service medical operations at the site and restore occupancy after the 2021 lockout.

The reopening provides a bridge between the prepetition disruptions and the chapter 11 filing. It signals that the property returned to active hospital operations, which can drive higher operating costs and a different tenant mix than a conventional medical office building. That shift toward acute care services adds context for the cash collateral budget's emphasis on utilities, HVAC, and maintenance expenses.

Key Dates and Upcoming Milestones

The timeline below combines the property's operating history with the current restructuring sequence reflected in the Disclosure Statement, Bidding Procedures Order, and March 6, 2026 scheduling order. The important shift is that the case moved from a failed confirmed sale in December 2025 into a new bid-and-plan process running through April 2026.

Frequently Asked Questions

When did Platinum Heights, LP file for chapter 11 bankruptcy?

The Disclosure Statement states that Platinum Heights filed chapter 11 on February 20, 2025 in the U.S. Bankruptcy Court for the Southern District of Texas.

Where is the case pending and what is the case number?

The case is pending in the Southern District of Texas before Judge Alfredo R. Perez under Case No. 25-90012, as reflected in the Second Plan.

What is the primary asset in the case?

The Disclosure Statement says the debtor's sole business is owning and operating the Heights Hospital real property at 1917 Ashland Street in Houston.

Who is the secured lender and how large is the secured claim?

b1BANK is the secured lender. Its proof of claim asserts $28,486,251.70 as of the petition date, while the Second Plan defines the allowed secured lender claim at $26.7 million for plan treatment purposes.

Why did the confirmed plan fail to go effective?

The Disclosure Statement says the confirmed plan depended on a sale to Strategic Plus Properties - Heights Healthcare, LLC, and that the buyer stated on December 24, 2025 that the acquisition agreement would not close.

What relief is the debtor seeking in the latest cash collateral motion?

The Second Cash Collateral Motion sought continued authority to use rents and other collateral proceeds, with replacement liens and monthly adequate-protection payments of $191,134 while the case proceeded toward a new sale or plan.

What are the next key dates in the case?

The March 6, 2026 scheduling order sets April 7, 2026 as the voting and confirmation-objection deadline and April 15, 2026 as the combined disclosure statement approval and confirmation hearing, while the Bidding Procedures Order sets an April 9, 2026 auction.

What does the current cash collateral budget suggest about operating cash flow?

The budget attached to the Final Cash Collateral Order shows receipts concentrated in rent from PAM Health and Ashland Healthcare, cash balances dropping as low as $7,451, and continuing utility, maintenance, and lender-protection costs that leave little liquidity cushion.

What are the debtor's estimated claim amounts by class?

The Disclosure Statement places b1BANK debt at about $28.486 million as of the petition date, identifies REILS guaranty exposure of about $17.039 million, and also lists more than $14 million of affiliate loans.

Who is the claims agent for Platinum Heights, LP?

Epiq Corporate Restructuring, LLC serves as the claims and noticing agent, as reflected in the case docket and solicitation materials described in the Disclosure Statement.

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