According to the U.S. Courts’ website, a chapter 11 bankruptcy involves either a voluntary petition made by the debtor or an involuntary petition made by the creditor. In the chapter 11 process, the debtor, usually a corporation or partnership, will generally offer a plan to reorganize their company while repaying their creditors.
In this case, it is expected the hospital will be sold to Prime Healthcare, an Ontario, Calif.-based company that is currently managing the facility, Monroe Hospital CEO Joe Roche said.
Roche said he expects the transfer to be completed by early November and that none of the hospital’s more than 300 employees are expected to lose their jobs during the transition period.
The 32-bed hospital on Bloomington’s south side owes around $134 million to various firms and companies, Roche said. He added that a bulk of this debt, approximately $121.8 million, is attributed to the hospital’s inability to make rent payments to its landowner, Medical Properties Trust.
Most of the loans the hospital was given were not received by the hospital and were taken out to cover fees and penalties, Roche said.
He said the hospital has been unable to pay the rent on its building since 2008 or 2009.
“It pretty quickly, after it opened, had to borrow money to sustain its operations,” Roche said. “So while there have been periods of time – years – where the hospital was able to meet its operating cash needs and pay all of its bills without borrowing money, it still needed to pay the rent.”
The hospital, which Roche said typically cares for eight or nine patients at a time , is facing some of the same financial struggles as many of the nation’s small hospitals in today’s health care environment.
“It’s getting harder and harder for a small, independent hospitals to make ends meet,” Roche said.
The hospital opened to patients in 2006 and will remain in operation throughout the coming months as the bankruptcy proceedings continue, Roche said.
“The court approved us continuing in operation and paying our employees and working with the people that provide supplies to the hospital during this period, so it’s business as usual.”
Holly Hays
