Case 13-36405 Document 64 Filed in TXSB on 11/12/13 Page 1 of 220 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION IN RE: § § BROWN MEDICAL CENTER, INC., § CASE NO. 13-36405 § Debtors. § Chapter 11 NOTES REGARDING THE DEBTOR’S SCHEDULES OF ASSETS AND LIABILITIES AND STATEMENT OF FINANCIAL AFFAIRS 1. General. Elizabeth M. Guffy, Chapter 11 Trustee (the “Trustee”) for Brown Medical Center, Inc. (the “Debtor” or “BMC”) files these Schedules of Assets and Liabilities (“Schedules”) and Statement of Financial Affairs (“SOFA”). These Notes Regarding the Debtor’s Schedules of Assets and Liabilities and Statement of Financial Affairs (the “Notes”) pertain to, are incorporated by reference in, and comprise an integral part of all of the Debtor’s Schedules and SOFA. The Notes should be referred to, considered, and reviewed in connection with any review of the Schedules and SOFA. 2. Basis for Schedules and Statement of Financial Affairs. The information provided herein, except as otherwise noted, represents the assets and liabilities of the Debtor as of October 15, 2013, based on the information available to the Trustee. During her investigation of the Debtor’s financial affairs, the Trustee determined that BMC’s records are incomplete and inaccurate in many regards. Although the Trustee has made every effort to ensure that the Schedules and SOFA accurately portray the Debtor’s financial condition, the Trustee believes that there is a high probability that material errors and/or omissions exist. Creditors are advised to act accordingly. THE TRUSTEE DOES NOT ADOPT OR GUARANTY THE ACCURACY OF THE DEBTOR’S SCHEDULES AND STATEMENT OF FINANCIAL AFFAIRS. 3. Schedule F – Accounts Payable Schedule F includes amounts set forth in the Debtor’s accounts payable system. Some of these amounts may reflect obligations of third parties or obligations incurred by the Debtor on behalf of third parties that the Debtor historically paid under various arrangements with those third parties. The Trustee is continuing her investigation of these amounts and is listing them in Schedule F out of an abundance of caution. The listing of a creditor or claim in Schedule F therefore is not an admission or acknowledgement by the Trustee of the validity or enforceability of any claim against the Debtor, and the Trustee reserves the right to contest any claim listed on Schedule F. 3515505v1 Case 13-36405 Document 64 Filed in TXSB on 11/12/13 Page 2 of 220 B6 Summary (Official Form 6 - Summary) (12/07) }bk1{Form6.SummaryofSchedules}bk{ United States Bankruptcy Court Southern District of Texas In re Brown Medical Center, Inc. Case No. 13-36405 , Debtor Chapter 11 SUMMARY OF SCHEDULES Indicate as to each schedule whether that schedule is attached and state the number of pages in each. Report the totals from Schedules A, B, D, E, F, I, and J in the boxes provided. Add the amounts from Schedules A and B to determine the total amount of the debtor’s assets. Add the amounts of all claims from Schedules D, E, and F to determine the total amount of the debtor’s liabilities. Individual debtors must also complete the "Statistical Summary of Certain Liabilities and Related Data" if they file a case under chapter 7, 11, or 13. NAMEOFSCHEDULEATTACHED NO.OF ASSETS LIABILITIES OTHER (YES/NO) SHEETS A - Real Property Yes 1 0.00 B - Personal Property Yes 4 13,807,746.62 C - Property Claimed as Exempt No 0 D - Creditors Holding Secured Claims Yes 4,938,563.842 E - Creditors Holding Unsecured Yes 283,546.5529 Priority Claims (Total of Claims on Schedule E) F - Creditors Holding Unsecured Yes 22,494,058.42109 Nonpriority Claims G - Executory Contracts and Yes 12 Unexpired Leases H - Codebtors Yes 2 I - Current Income of Individual No 0 N/A Debtor(s) J - Current Expenditures of Individual No 0 N/A Debtor(s) Total Number of Sheets of ALL Schedules 159 Total Assets 13,807,746.62 Total Liabilities 27,716,168.81 SoftwareCopyright(c)1996-2013-BestCase,LLC-www.bestcase.com BestCaseBankruptcy Case 13-36405 Document 64 Filed in TXSB on 11/12/13 Page 3 of 220 B6A (Official Form 6A) (12/07) }bk1{ScheduleA-RealProperty}bk{ In re MedicalCase Center, No. Inc. 13-36405Brown , Debtor SCHEDULE A - REAL PROPERTY Except as directed below, list all real property in which the debtor has any legal, equitable, or future interest, including all property owned as a cotenant, community property, or in which the debtor has a life estate. Include any property in which the debtor holds rights and powers exercisable for the debtor's own benefit. If the debtor is married, state whether husband, wife, both, or the marital community own the property by placing an "H," "W," "J," or "C" in the column labeled "Husband, Wife, Joint, or Community." If the debtor holds no interest in real property, write "None" under "Description and Location of Property." Do not include interests in executory contracts and unexpired leases on this schedule. List them in Schedule G - Executory Contracts and Unexpired Leases. If an entity claims to have a lien or hold a secured interest in any property, state the amount of the secured claim. See Schedule D. If no entity claims to hold a secured interest in the property, write "None" in the column labeled "Amount of Secured Claim." If the debtor is an individual or if a joint petition is filed, state the amount of any exemption claimed in the property only in Schedule C - Property Claimed as Exempt. Current Value of Husband, Debtor's Interest in Description and Location of Property Nature of Debtor's Wife, Property, without Amount of Interest in Property Joint, or Deducting any Secured Secured Claim Community Claim or Exemption None Sub-Total>0.00 (Totalofthispage) Total > 0.00 0 continuation sheets attached to the Schedule of Real Property (Report also on Summary of Schedules) SoftwareCopyright(c)1996-2013-BestCase,LLC-www.bestcase.com BestCaseBankruptcy Case 13-36405 Document 64 Filed in TXSB on 11/12/13 Page 4 of 220 B6B (Official Form 6B) (12/07) }bk1{ScheduleB-PersonalProperty}bk{ In re MedicalCase Center, No. Inc. 13-36405Brown , Debtor SCHEDULE B - PERSONAL PROPERTY Except as directed below, list all personal property of the debtor of whatever kind. If the debtor has no property in one or more of the categories, place an "x" in the appropriate position in the column labeled "None." If additional space is needed in any category, attach a separate sheet properly identified with the case name, case number, and the number of the category. If the debtor is married, state whether husband, wife, both, or the marital community own the property by placing an "H," "W," "J," or "C" in the column labeled "Husband, Wife, Joint, or Community." If the debtor is an individual or a joint petition is filed, state the amount of any exemptions claimed only in Schedule C - Property Claimed as Exempt. Do not list interests in executory contracts and unexpired leases on this schedule. List them in Schedule G - Executory Contracts and Unexpired Leases. If the property is being held for the debtor by someone else, state that person's name and address under "Description and Location of Property." If the property is being held for a minor child, simply state the child's initials and the name and address of the child's parent or guardian, such as "A.B., a minor child, by John Doe, guardian." Do not disclose the child's name. See, 11 U.S.C. §112 and Fed. R. Bankr. P. 1007(m). N Husband, Current Value of O Wife, Debtor's Interest in Property, Type of Property N Description and Location of Property Joint, or without Deducting any E Community Secured Claim or Exemption 1. Cashonhand X 2. Checking, savings or other financial SeeAttachmentB-2 - 321,327.42 accounts, certificates of deposit, or shares in banks, savings and loan, thrift, building and loan, and homestead associations, or credit unions, brokerage houses, or cooperatives. 3. Security deposits with public X utilities, telephone companies, landlords, and others. 4. Household goods and furnishings, X including audio, video, and computer equipment. 5. Books, pictures and other art X objects, antiques, stamp, coin, record, tape, compact disc, and other collections or collectibles. 6. Wearing apparel. X 7. Furs and jewelry. X 8. Firearms and sports, photographic, X and other hobby equipment. 9. Interests in insurance policies. X Name insurance company of each policy and itemize surrender or refund value of each. 10. Annuities. Itemize and name each X issuer. Sub-Total > 321,327.42 (Total of this page) 3 continuation sheets attached to the Schedule of Personal Property SoftwareCopyright(c)1996-2013-BestCase,LLC-www.bestcase.com BestCaseBankruptcy Case 13-36405 Document 64 Filed in TXSB on 11/12/13 Page 5 of 220 B6B (Official Form 6B) (12/07) - Cont. In re MedicalCase Center, No. Inc. 13-36405Brown , Debtor SCHEDULE B - PERSONAL PROPERTY (Continuation Sheet) N Husband, Current Value of O Wife, Debtor's Interest in Property, Type of Property N Description and Location of Property Joint, or without Deducting any E Community Secured Claim or Exemption 11. Interests in an education IRA as X defined in 26 U.S.C. § 530(b)(1) or under a qualified State tuition plan as defined in 26 U.S.C. § 529(b)(1). Give particulars. (File separately the record(s) of any such interest(s). 11 U.S.C. § 521(c).) 12. Interests in IRA, ERISA, Keogh, or X other pension or profit sharing plans. Give particulars. 13. Stock and interests in incorporated Owns 69% of the partnership interest of St.