It may be a desperate measure, but hospitals' filing bankruptcy may be the latest strategy to avoid lawsuits and payments, compensate top execs, or sell the hospital to another company. Hospitals that have recently filed for Chapter 11 are under the watchful eye of the public, who speculate on the reasons for filing bankruptcy papers.
New York's St. Vincent Hospital, which closed in April 2010, is under investigation for fraud, as the New York District Attorney accuses the Catholic charity hospital of purposely sinking finances, according to the New York Post. The bankruptcy cleared the way for St. Vincent's to sell the hospital to a private developer who plans to build luxury housing on the site.
Amidst the scandal is a $1 billion debt and bankruptcy for the hospital, which paid two senior administrators, including the top nursing officer and president, $1 million each.
In New Jersey, Hoboken University Medical Center's operator Hudson Healthcare this month declared bankruptcy. The result: Under the settlement, the hospital operator will not have to pay the $2 million it owes to the city, reports the Hudson Reporter.
Weeks before the hospital filed for bankruptcy, CEO Spiros Hatiras received a $600,000 payout upon resigning, which has caused quite a stir among the employees who are looking for $1.45 million in pensions and health benefits.
Meanwhile in New Mexico, Gerald Champion Regional Medical Center petitioned under Chapter 11 while the hospital attempts to resolve 47 medical malpractice lawsuits it is involved in, reports the Albuquerque Journal.
"...Chapter 11 provides the hospital with a mechanism to resolve the lawsuits," said board chairman Norm Arnold in the article.
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