Eastern Connecticut Health Network, Manchester, signed an asset purchase agreement with Johnson Memorial Corp., Stafford Springs, Conn., which cut 56 jobs last week and is expected to file for Chapter 11.
Johnson Memorial Corp., which includes 92-bed Johnson Memorial Hospital, is seeking bankruptcy protection allowing the corporation to restructure its business model and debt, which will enable it to emerge as a financially stronger organization, spokeswoman Amy Krysiewski said in an e-mail. She cited payroll and benefits as the companys largest expense and must be monitored and adjusted while stabilizing the organization.
The deal requires approval from the bankruptcy court, the state attorney general and the states certificate-of-need agency. If approved, the deal is expected to close by June 30, 2009. Andrew Beck, a spokesman for Eastern Connecticut Health, said its potential partners bankruptcy filing was planned prior to acquisition talks. The two-hospital system is expected to file a CON application shortly, he said. -- by Melanie Evans