Platinum Heights: Heights Hospital Plan Collapse in Chapter 11

Platinum Heights, LP filed for chapter 11 on February 20, 2025 in the U.S. Bankruptcy Court for the Southern District of Texas to stabilize operations around its single primary asset, the Heights Hospital medical professional building at 1917 Ashland Street in Houston. The case is a single-asset real estate restructuring centered on one medical property. The debtor's capital structure is dominated by a single secured lender, b1Bank, with petition-date indebtedness of about $28.3 million secured by the real property and related collateral. The case moved through plan confirmation on December 5, 2025, but the sale-backed plan failed to go effective after the sponsor declined to close on December 24, 2025, pushing the debtor back into renewed cash collateral negotiations and exclusivity disputes with its secured lender.

The Heights Hospital property has a long operating and financing history. The six-story, roughly 192,000-square-foot building on about 3.94 acres in Houston's Heights neighborhood has been anchored by St. Joseph Medical Center and was previously operated by Select Specialty Hospitals. The property was purchased in 2017 by AMD Global and Medical Center Developments with a renovation and service expansion plan, and it was later refinanced through a $28 million first-mortgage loan in 2019. The site also saw disruptions before the filing, including a 2021 lockout tied to unpaid rent and a 2022 reopening as an acute care facility. Those operational shifts provide context for the asset-centric nature of the bankruptcy.

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
Primary Asset	Heights Hospital medical professional building, 1917 Ashland Street, Houston, Texas
Secured Lender	b1Bank
Petition-Date Secured Debt	$28.3 million (approx.)
Plan Confirmation Date	December 5, 2025
Plan Sponsor (Failed Sale)	Strategic Plus Properties - Heights Healthcare, LLC
Current Posture	Plan effective date failed; debtor seeking a new plan and cash collateral authorization

Plan Collapse and Cash Collateral Dispute

Capital structure and secured lender leverage. The Second Cash Collateral Motion indicates that the debtor's capital structure is dominated by a single secured loan held by b1Bank, secured by the Heights Hospital real property and related collateral including fixtures, equipment, leases, and rents. Petition-date indebtedness was reported at approximately $28.3 million, positioning the lender as the primary stakeholder in the case. The debtor's filings describe the Heights Hospital building as its core operating asset, making the cash flow from tenant rent and medical operations central to collateral coverage and liquidity decisions.

The secured loan is tied to a deed of trust dated September 29, 2022 and is backed by a first-priority security interest in the real estate and associated personal property. The collateral package includes lease agreements and rent streams, which means the debtor's primary liquidity source is itself the lender's cash collateral. As a result, the debtor has repeatedly returned to court to authorize use of cash collateral for operating costs such as utilities, building maintenance, and professional fees.

The debtor's estimates show unsecured claims that exceed the secured debt balance, with priority claims adding another layer of required payments. The debt profile helps explain why the confirmed plan relied on a sale transaction to resolve the secured loan while also addressing unsecured and priority obligations. It also frames why extensions of exclusivity and cash collateral relief have become central to the case posture after the sale failed.

Plan history and failed effective date. The debtor filed an initial plan and disclosure statement on September 15, 2025 and amended them on October 6, 2025. A solicitation order followed on October 7, 2025, and the court confirmed the plan on December 5, 2025. The plan relied on a sale of the Heights Hospital asset to Strategic Plus Properties - Heights Healthcare, LLC. The debtor reported that the plan's target effective date was around December 22, 2025, but the sponsor indicated on December 24, 2025 that the closing would not occur. The debtor is now pursuing a new joint plan with a group of "2026 Debtors," sponsored by a REILS affiliate, as the current strategy rather than a finalized outcome.

The failure of the sale-backed plan left the debtor without an effective date and without the transaction contemplated to monetize its primary asset. The filings show that the debtor is now seeking to regroup around a joint plan concept, but that shift requires additional time under exclusivity to finalize terms. The secured lender's objections highlight a fundamental timing dispute: the debtor wants additional runway, while the lender argues exclusivity has lapsed and should not be extended.

The debtor's Exclusivity Motion seeks additional time to propose and solicit a revised plan in light of the failed sale. The requested deadlines would move the plan filing deadline to March 24, 2026 and the solicitation deadline to May 25, 2026. The secured lender objected to the request, arguing that exclusivity expired in October and December 2025 and should not be extended again.

The docket also includes a notice that a transcript of the December 5, 2025 confirmation hearing was filed, with access restricted until April 30, 2026. The notice underscores that the case progressed to confirmation but subsequently reverted to a contested posture after the effective date failed.

Cash collateral history and adequate protection. The debtor has operated under multiple cash collateral orders. Prior authorization covered use of cash collateral through August 15, 2025, followed by a stipulated extension through November 30, 2025. A second emergency motion for cash collateral use was filed on January 25, 2026. The proposed adequate protection package includes replacement liens on postpetition property to the same extent and priority as prepetition liens, monthly adequate protection payments of $191,134, and protection against diminution in value. The Interim Cash Collateral Order entered on February 2, 2026 authorized use of cash collateral under an agreed budget and set an objection deadline of February 10, 2026 with a final hearing scheduled for February 17, 2026.

The interim order was effective immediately upon entry and required the debtor and b1Bank to negotiate in good faith over future cash collateral usage. The order also established procedural guardrails for final relief, including the objection deadline and the final hearing date.

Interim liquidity profile. The interim budget attached to the cash collateral motion provides a snapshot of near-term liquidity across three weeks in late January and early February 2026. The budget shows tight starting cash balances, reliance on rent receipts for liquidity, and significant operational disbursements tied to building maintenance and utilities. One week includes receipts of $69,211 identified as base rent and additional rent from a PAM Health tenant, while other weeks show no receipts. It also includes a line item labeled "DIP balance" of $605,000 throughout the three-week period, but the motion itself seeks authority to use cash collateral rather than approval of a separate DIP facility.

Contested matters and procedural posture. In its objection, the secured lender challenged the debtor's request for an emergency extension of exclusivity, asserting that exclusivity expired in October and December 2025 and that the debtor failed to show cause for a third extension. The lender also objected to emergency cash collateral relief in a case that had been pending for nearly a year, and it requested that final cash collateral relief be deferred until its stay-relief motion is heard. b1Bank filed a Motion for Relief from Stay on January 16, 2026, increasing pressure on the asset. The objections also asked for a status conference and challenged the emergency nature of the debtor's filings, underscoring the lender's push to move the case toward a disposition of the collateral. The interim cash collateral order requires the debtor and lender to negotiate the future use of cash collateral in good faith, indicating that the dispute remains active while the case timeline advances.

Operating Model and Property-Level Cash Flow

Court filings describe Platinum Heights, LP as the operator of a medical professional building rather than a diversified operating company. The debtor's business depends on continued operation of the building, including maintenance of utilities and insurance coverage that support patient care and tenant operations. That operating model means the chapter 11 case is heavily focused on rent receipts, building-level expenses, and the landlord-tenant dynamics of a medical campus. The cash collateral filings emphasize that the debtor's ability to use rent streams is essential to keep the facility operating and to meet basic obligations such as utilities, repairs, and professional costs during the case.

The short-term budget presented with the Cash Collateral Motion illustrates the operating pressures. It projects a single week of rent receipts ($69,211) driven by base rent and additional rent from a PAM Health tenant, while other weeks show no receipts. At the same time, building expenses remain front-loaded: the budget includes a $24,681 HVAC rental payment in the week ending January 30, a $54,500 utilities payment in the week ending February 6, and ongoing repairs and maintenance of roughly $2,000 per week. The budget also includes a U.S. Trustee fee and a large adequate assurance payment to the secured lender, reflecting the administrative costs of the case.

Beginning cash balances in the budget fall from $219,637 in late January to $11,451 and $8,951 in early February, highlighting the debtor's limited liquidity cushion. Even modest operating disbursements materially affect cash on hand, which helps explain why cash collateral authorization and adequate protection terms are central to the case timeline. The debtor's filings also list a "DIP balance" line item of $605,000 across the three-week budget period, but the motion itself seeks cash collateral authority rather than approval of a separate DIP facility.

Administrative costs further compress liquidity. The budget includes a U.S. Trustee fee and a $182,269 adequate assurance payment to the secured lender in the week ending February 6, 2026, which is a large cash outflow relative to the total receipts projected for the same period. That structure underscores how debt service and case administration can consume much of the available cash, leaving a narrow margin for property-level repairs and tenant-facing expenses. The debtor's reliance on interim cash collateral relief, coupled with the secured lender's objections, places near-term operations on a tight procedural calendar.

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 Houston property records valuing the building at about $12.1 million and describing it as built in 1978 with a 2010 remodel. That valuation context provides another data point for how the market viewed the asset's scale at the time of the renovation push.

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 it would stop accepting patients and close its Heights location 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. This earlier disruption underscores that the property's medical tenancy has shifted over time rather than remaining static.

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 case timeline blends property-level events with restructuring milestones. The earlier entries reflect shifts in ownership, leasing, and operations at the Heights Hospital campus, including the 2015 Select Specialty closure, the 2017 acquisition and renovation push, the 2019 refinancing, the 2021 lockout, and the 2022 reopening. The later entries show how the chapter 11 case progressed from petition date to plan confirmation, then reverted to contested cash collateral and exclusivity issues after the sale-backed plan failed to go effective. The near-term dates focus on the court's cash collateral schedule and the debtor's requested extension of plan and solicitation deadlines.

Frequently Asked Questions

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

The debtor filed 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 (Houston Division) under Case No. 25-90012.

What is the primary asset in the case?

The debtor's operations center on the Heights Hospital medical professional building at 1917 Ashland Street in Houston.

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

b1Bank is the secured lender, and the debtor reported petition-date indebtedness of about $28.3 million.

Why did the confirmed plan fail to go effective?

The plan depended on a sale to Strategic Plus Properties - Heights Healthcare, LLC, and the debtor reported that the sponsor stated on December 24, 2025 that the closing would not occur.

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

The debtor is seeking authority to use cash collateral on an interim and final basis, with replacement liens and monthly adequate protection payments of $191,134 while the case proceeds.

What are the next key dates in the case?

The interim cash collateral order set a February 10, 2026 objection deadline and a February 17, 2026 final hearing, and the debtor requested extended plan and solicitation deadlines of March 24 and May 25, 2026.

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

The three-week budget shows one week of rent receipts of $69,211 from base and additional rent, while other weeks list no receipts. Major near-term expenses include a $24,681 HVAC rental, a $54,500 utilities payment, and weekly repairs and maintenance of about $2,000, indicating that building expenses remain significant even in weeks with limited rent inflows.

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

In its Exclusivity Motion, the debtor estimated approximately $28.5 million of secured claims, $4.0 million of priority claims, and $38.2 million of unsecured claims.

Who is the claims agent for Platinum Heights, LP?

Epiq Corporate Restructuring, LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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