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May 20, 2016

A&M was hired as restructuring advisers and crisis managers after the company discovered a massive accounting fraud.

Client Mandate
HealthSouth was the nation’s largest provider of outpatient surgery, diagnostic testing and rehabilitation services, with more than 46,000 medical and business professionals in nearly 1,700 locations throughout the U.S. A&M was hired as restructuring advisers and crisis managers after the company discovered a massive accounting fraud. Because its real estate obligations were a top expense line item, the crisis management and turnaround plan included an allowance for the liquidation of non-core real estate assets and implementation of operating expense reductions. 

A&M’s Approach
A&M's real estate advisory services (REAS) professionals analyzed the HealthSouth real estate portfolio to identify vacant and underutilized properties and facilities, with priority placed on those assets with significant remaining financial obligations. Our professionals developed standardized templates, process and compliance tools to facilitate efficient transaction discussions and obtain necessary approvals from the HealthSouth executive committee. We researched and maintained the payment and legal documentation required to terminate the company’s obligation to landlords or other stakeholders.

Finally, A&M REAS professionals conducted real estate valuation and designed and administered a transaction plan to attract qualified buyers, negotiate and approve sale / leaseback guidelines as necessary and address legal prerequisites for asset sales.

Results
A&M’s strategy development and implementation leadership helped the Company avoid bankruptcy. The HealthSouth engagement demonstrated A&M’s ability to mobilize aspects of our entire platform to administer the HealthSouth turnaround.

A&M REAS unlocked significant value and immediately deployable capital for HealthSouth, including: 

  • Lease buy-outs equated to over $12.5 million in total obligations
  • Sale of non-core real estate assets resulted in net proceeds of over $25 million 
  • Lease re-casting and restructuring savings totaled over $35 million