Jackson Health told lenders last August that the system projected operating losses of $56 million for fiscal 2009, which ended last September and $168 million for 2010.
During the first eight months of the system's fiscal 2009, Jackson Health had enough cash saved to operate, on average, for about 20 days without revenue, down from the average 42 days for the prior year. The system blamed delayed Medicaid payments from Florida as one factor in the decline.
Earlier this month, Jackson Health warned investors that revenue for 2009 would fall short of certain lending agreements.
Jackson Health can avoid defaulting on the debt if the system promptly hires a consultant and adopts the consultant's recommended changes to rates, fees, charges and operations and the system is expected to do so once audited financial figures are released, according to the notice.
The system also named Christopher Bayer to succeed Frank Barrett as chief financial officer in mid-February. Bayer, vice president of budget and financial analysis, was named interim CFO. Barrett is expected to retire in May.
In October, Jackson said it would cancel a $1.8 million consulting contract following reports that turnaround firm Qorval, Naples, Fla., planned to appoint an executive named in an alleged criminal conspiracy in Chicago as Jackson Health's temporary restructuring officer.
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