A long-struggling hospital in Orlando, Fla., has landed in bankruptcy court following the pre-holiday resignation of its chief executive officer and seven other top managers.
Ken Lukhard, who served as CEO of 150-bed Princeton Hospital for the past nine months, declined to discuss his reasons for leaving, on advice from his attorney. But Lukhard's comments hinted at the gravity of the situation.
"When people leave a job one week before Christmas, they don't do that before thinking about it. So we all made that decision painfully," he said.
The departing management team also included the hospital's chief financial officer, controller, chief nursing officer/chief operating officer, medical staff coordinator, human resources director, healthcare information systems director and the head of behavioral medicine, he said.
Lukhard, a 46-year-old father of seven, had been employed by NewCare Hospital Corp., which landed a five-year contract to manage Princeton in 1997. The for-profit management company is a subsidiary of NewCare Health Corp., an Atlanta-based firm specializing in long-term care and senior living.
The hospital itself is a freestanding not-for-profit facility.
At deadline, NewCare Hospital President Arthur Doloresco had not returned calls seeking comment on the matter. The fate of NewCare's contract was unclear.
But Frank Mock, an attorney representing the hospital's board of directors, issued a statement describing the reorganization efforts.
According to the statement, Princeton is encumbered by $57 million of debt on assets of just $25 million.
In the statement, board Chairman Joe Collins said, "We believe that Princeton Hospital is a viable healthcare facility and that it should remain open to serve its community."
The hospital has obtained a $450,000 loan to help meet payroll while the officials hammer out a restructuring blueprint and seek additional interim financing.
The hospital filed for bankruptcy protection Jan. 5 in U.S. Bankruptcy Court in Orlando.
NewCare Health Corp. is traded on the NASDAQ exchange. NewCare Hospital Corp. also manages 84-bed Meadowbrook Rehabilitation Hospital, Gardner, Kan. It is involved in litigation over a third management contract terminated by the board of 131-bed Tri-City Hospital in Dallas.