The parent company of Johnson Memorial Hospital in Stafford Springs, Conn., has emerged from nearly two years under Chapter 11 bankruptcy protection, reports the Hartford Business Journal.
Johnson Memorial Corp. filed for bankruptcy in November 2008, citing mounting losses. The hospital's margin of -8.48 percent during fiscal 2009 made it the worst-performing acute care facility in Connecticut.
However, the hospital has since cut about 10 percent of its staff and implemented other cost reductions that have added $30 million a year to its bottom line. Officials now project the hospital will end this year with positive operating earnings.
"Emerging from bankruptcy without being sold or merged into another organization is an unusual outcome in the healthcare industry," said Johnson Memorial CEO Peter J. Betts. "This was an excellent result for the community, local businesses and over 1,000 community members that are part of the JMMC team," he said.
In addition to the hospital, Johnson Memorial Corp. also operates two medical groups and several outpatient clinics.
As part of the plan with creditors, Johnson will pay $9.3 million in pension obligations, and rename the hospital Johnson Memorial Medical Center. Healthcare Finance Group, which specializes in credit facilities to hospitals, has also provided an $8 million line of credit.
Betts, Johnson's interim CEO during the bankruptcy, has been named to the position permanently, with the same transition made for its chief operating officer.
- read the Hartford Business Journal article
- read the Healthcare Finance Group press release