UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No.  )¹

Quorum Health Corporation

(Name of Issuer)

Common Stock, par value $0.0001

(Title of Class of Securities)

74909E106

(CUSIP Number)

STEVE WOLOSKY, ESQ.

OLSHAN FROME WOLOSKY LLP

1325 Avenue of the Americas

New York, New York 10019

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

March 11, 2020

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.

1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

The following constitutes the Schedule 13D filed by the undersigned (the “Schedule 13D”).

This statement relates to the Common Stock, $0.0001 par value per share (the “Shares”), of Quorum Health Corporation, a Delaware corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 1573 Mallory Lane, Brentwood, Tennessee 37027.

This statement is filed by:

Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting Persons is party to that certain Joint Filing Agreement as further described in Item 6. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D.

(b)       The address of the principal business office of each of the Reporting Persons is 527 Madison Avenue, 6^th Floor, New York, NY 10022.

(c)       The principal business of each of Drawdown II LP and Global LP is investing in securities. The principal business of Mudrick GP is acting as the general partner of Global LP. The principal business of Drawdown II GP is acting as the general partner of Drawdown II LP. The principal business of MCM is acting as the investment manager to Drawdown II LP, Global LP and certain separately managed accounts. The principal business of MCM GP is acting as the general partner of MCM. The principal occupation of Mr. Mudrick is serving as the sole member of the Mudrick GP, Drawdown II GP and MCM GP.

(d)       No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e)       No Reporting Person has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f)       Mr. Mudrick is a citizen of the United States of America.

The Shares purchased by Drawdown II LP were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases, except as otherwise noted. The aggregate purchase price of the 943,870 Shares beneficially owned by Drawdown II LP is approximately $608,101, including brokerage commissions.

The Shares purchased by Global LP were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases, except as otherwise noted. The aggregate purchase price of the 1,414,047 Shares beneficially owned by Global LP is approximately $917,596, including brokerage commissions.

The Shares purchased by MCM on behalf of certain managed accounts were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases, except as otherwise noted. The aggregate purchase price of the 913,675 Shares beneficially owned by MCM on behalf of certain managed accounts is approximately $596,800, including brokerage commissions.

The Reporting Persons purchased the securities of the Issuer based on the Reporting Persons’ belief that such securities, when purchased, were undervalued and represented an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of securities of the Issuer at prices that would make the purchase or sale of such securities desirable, the Reporting Persons may endeavor to increase or decrease their position in the Issuer through, among other things, the purchase or sale of securities of the Issuer on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may deem advisable.

On March 23, 2020, the Reporting Persons’ legal counsel delivered a letter (the “Letter”) to the Issuer’s board of directors (the “Board”) to express the Reporting Persons’ concerns that the Issuer has yet to reach an agreement with certain of its lenders to ensure that it remains a viable going concern without the need for a bankruptcy filing or other reorganization. In the Letter, the Reporting Persons expressed their belief that pursuing a value destructive restructuring process with the Issuer’s creditors is unnecessary and contrary to the Board’s fiduciary obligations to shareholders. The Letter stated that an amendment to the existing credit agreement among the Issuer, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent, that provides the Issuer with a short term bridge to avoid bankruptcy or other restructuring and realize the value generated by its recent cost savings and other initiatives would be in the best interest of all stakeholders. The Reporting Persons concluded the Letter by requesting a meeting with the Board to discuss the actions that the Reporting Persons believe are necessary for the Issuer to correct its course.

The foregoing description of the Letter does not purport to be complete and is qualified in its entirety by reference to the full text of the Letter, which is filed as Exhibit 99.2, and is incorporated herein by reference.

No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein. The Reporting Persons intend to review their investment in the Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels of the Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, engaging in communications with management and the Board, engaging in discussions with stockholders of the Issuer or other third parties about the Issuer and the Reporting Persons’ investment, including potential business combinations or dispositions involving the Issuer or certain of its businesses, making recommendations or proposals to the Issuer concerning changes to the capitalization, ownership structure, board structure (including board composition), potential business combinations or dispositions involving the Issuer or certain of its businesses, or suggestions for improving the Issuer’s financial and/or operational performance, purchasing additional Shares, selling some or all of their Shares, engaging in short selling of or any hedging or similar transaction with respect to the Shares, including swaps and other derivative instruments, or changing their intention with respect to any and all matters referred to in Item 4. 

The aggregate percentage of Shares reported owned by each Reporting Person is based upon 32,916,020 Shares outstanding, as of November 6, 2019, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 7, 2019.

Percentage: Approximately 2.9%

Percentage: Approximately 4.3%

Percentage: Approximately 4.3%

Percentage: Approximately 2.9%

Percentage: Approximately 9.9%

Percentage: Approximately 9.9%

Percentage: Approximately 9.9%

The filing of this Schedule 13D shall not be construed as an admission that the Reporting Persons are, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, the beneficial owners of any of the Shares reported herein. Each Reporting Person disclaims beneficial ownership of such Shares except to the extent of his or its pecuniary interest therein.

On March 23, 2020, the Reporting Persons entered into a Joint Filing Agreement in which the Reporting Persons agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer to the extent required by applicable law. The Joint Filing Agreement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: March 23, 2020.

SCHEDULE A

Transactions in the Shares of the Issuer During the Past Sixty Days

MUDRICK DISTRESSED OPPORTUNITY DRAWDOWN FUND II, L.P.

MUDRICK DISTRESSED OPPORTUNITY FUND GLOBAL, L.P.

MUDRICK CAPITAL MANAGEMENT, l.p.
(through certain managed accounts)

Exhibit 99.1

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of a Statement on Schedule 13D (including additional amendments thereto) with respect to the shares of Common Stock, par value $0.0001 per share, of Quorum Health Corporation, a Delaware corporation. This Joint Filing Agreement shall be filed as an Exhibit to such Statement.

Dated: March 23, 2020

Exhibit 99.2

March 23, 2020

Board of Directors of
Quorum Health Corporation
1573 Mallory Lane
Brentwood, Tennessee 37027
Attn: Ms. Terry Allison Rappuhn, Chair

Dear Ms. Rappuhn:

We are counsel to Mudrick Capital Management, LP (“Mudrick”), beneficial owner of approximately 10% of the Company’s equity securities. We are deeply troubled by the fact that the Company has yet to reach an agreement with certain of its lenders to ensure that it remains a viable going concern without the need for a bankruptcy filing or other reorganization.

As the Company’s board of directors (the “Board”) is no doubt aware, there is substantial risk that the Company will trigger a covenant default under that certain credit agreement (the “CS Agreement”), among the Company, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent. Specifically, management has concluded that there is a probability that the Company will not comply with the maximum Secured Net Leverage Ratio permitted under the CS Agreement at the end of the first quarter of 2020.

Despite the fact that the Board has been aware of this impending risk of default for over a year – and has disclosed the issue in, at least, its last three 10-Q filings – the Company has yet to reach an agreement with the lenders under the CS Agreement to ameliorate the issue. Instead, to date, the Company has only disclosed its intention to enter into discussions with the Company’s lenders to modify the maximum Secured Net Leverage Ratio. The apparent lack of alacrity is surprising, given the Company’s prior actions to resolve issues that have arisen in connection with the CS Agreement via amendments. Indeed, on April 11, 2017 and March 14, 2018, the Company executed agreements with the lenders to amend certain provisions of the CS Agreement.

Kasowitz Benson Torres llp

Board of Directors of
Quorum Health Corporation

March 23, 2020

Page 2

More troubling, it has come to Mudrick’s attention that certain debt holders are advocating that the Company “solve” the issue through a bankruptcy filing, rather than another amendment to the CS Agreement, and use such process to squeeze out existing shareholders. This is no solution as there is no basis for such a value destructive event.

The Company is currently solvent and there remains substantial value for shareholders. Management’s own accounting indicates that substantial equity value exists. This cannot be seriously contested – the Company’s largest creditor acknowledged in December 2019 that, even valuing the Company on a most distressed basis, equity value exists. Additionally, management’s estimates indicate that the Company’s enterprise value will substantially increase over the next year. Indeed, the Board has stated that the Company will realize substantial cost savings and improvement in net patient revenues through improvements in operational effectiveness and efficiencies as a result of the Company’s partnership with R1 RCM. On May 8, 2019, the Company entered into an agreement with R1 RCM to receive end-to-end revenue cycle management services. And, effective October 1, 2019, following the transition of the Company’s billing and collection services to R1 RCM, it will begin to realize the resulting cost savings and revenue enhancements. As a result of its efforts, management believes that EBITDA could increase $55 million (between R1 RCM partnership and cost reduction actions already implemented) from $140 million (low end of the 2019 EBITDA guidance) to $195 million, which implies equity value in excess of $8 per share! Given management’s efforts and this potential value, now is not the time to let the Company slide into a restructuring process.

The Board’s fiduciary duties run exclusively to the Company’s shareholders and require it, specifically given the solvent financial circumstances of the Company, to maximize value for its shareholders. Failing to engage with the lenders to the CS Agreement and negotiate an amendment to address the Secured Net Leverage Ratio will significantly erode value and substantially harm the Company’s shareholders. If the Board continues to act in such manner, it is ignoring its fiduciary duties that indisputably are owed to the Company’s shareholders – and only its shareholders. Indeed, as the Delaware Chancery Court recently set forth in Quadrant Structured Products Co., LTD. v. Vertin, 115 A.3d 535 (Del. Ch. 2015), there is no legally recognized “zone of insolvency” with implications for fiduciary duty claims. The only transition point that affects fiduciary duty analysis is insolvency itself. The fact that the Company is unquestionably solvent removes all doubt that it is the shareholders exclusively to whom the Board owes its fiduciary duties.

As stated above, pursuing a value destructive restructuring process with the Company’s creditors is completely unnecessary and contrary to the Board’s obligations. Instead, an amendment that provides the Company with a short-term bridge to avoid bankruptcy or other restructuring and enables the Company to realize the value generated by its recent cost savings and other initiatives is in the best interest of all stakeholders. The Board should suffer no illusions whether this is the correct path. Boards routinely examine strategic alternatives and opt not to pursue them when shareholder value is not maximized. The Board should do that here and reject the restructuring path advocated by certain creditors.

Kasowitz Benson Torres llp

Board of Directors of
Quorum Health Corporation

March 23, 2020

Page 3

We request a meeting with you at your earliest possible convenience to discuss actions that the Company must take to correct its course. This letter does not waive any right, remedy, claim, or relief that Mudrick has now or in the future, each of which is reserved in full.

cc: Matthew B. Stein, Esq.

David Kirsch
Matthew Pietroforte