A chef who cooked meals to order and views from every room were not enough to keep the Forest Park Medical Center at Frisco, Texas, out of bankruptcy court.
The 54-bed hospital filed for Chapter 11 bankruptcy protection in a Dallas federal court on Tuesday. The hospital owes a Texas bank $6 million and is losing $900,000 a month on operations, the court records said. The hospital, which opened in July 2012, owes its landlord $8.5 million. Eighty-six doctors own the hospital, which will likely close without new financing, the records stated.
The hospital initially did not contract with insurance companies as an in-network provider, but the strategy failed, the court records said. New insurance contracts did not produce enough new patients to keep the hospital solvent.
The hospital won interim approval to restructure from a bankruptcy judge on Wednesday, said spokeswoman Kandace Cortez.
"Forest Park Frisco is choosing to make a voluntary effort to restructure in order to transition to a healthy business foundation after facing a number of challenges since opening in 2012," a statement released by the hospital said.
"These challenges, from unprecedented change in the healthcare market to other external factors, made it clear that action had to be taken and Forest Park Frisco has chosen the proactive approach to return the business to a healthy, viable state."
The hospital, which employs 159 people, is operating with enough staff for one to three patients and 200 outpatients. The hospital owes Texas Capital Bank $6 million for equipment financing and to repay a line of credit.
The founders of Forest Park Medical Center at Frisco, two doctors and two healthcare executives, also founded five other Texas hospitals and have a sixth proposed in Kansas City, Mo. One hospital in Austin, Texas, is not yet open.
A hearing on the bankruptcy filing was scheduled for Wednesday.