A federal bankruptcy judge has approved a reorganization plan that will allow 289-bed St. Mary's Hospital in Passaic, N.J., to reorganize its debts and continue to operate without selling all its assets to another party.
Judge OKs St. Mary's reorganization plan
A news release from the hospital said it was the first of New Jersey's five hospitals that have declared bankruptcy since 2007 to emerge from Chapter 11 court proceedings with its business still intact. The others have all either seen their reorganization plans rejected, or have had to sell their assets to another party, according to the release.
The stand-alone hospital filed a voluntary petition for bankruptcy in March 2009, after efforts to find a strategic partner to purchase its assets failed, according to court records. The hospital posted an operating loss of $16.5 million in 2008, and “by the middle of 2008 the debtor (St. Mary's Hospital) realized that it might not be able to continue absent an immediate cash infusion.”
One of the numerous creditors in the case is the CMS, which is owed $6.7 million for an undisclosed Sept. 30, 2009 claim related to Medicare disproportionate-share payments. In addition, three labor unions accepted modified claims.
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