Santa Paula Memorial Hospital owes money to about 375 creditors, including several supply and medical personnel firms that have sued in Ventura County Superior Court.Those at the Oct. 30th creditors’ meeting were told by the SPMH work-out team – two Ventura attorneys, two CPAs from a Los Angeles firm that said they specialize in bankruptcy and insolvency, a Los Angeles attorney who said he was dealing with hospital employee pension issues and Mark Gregson, the former SPMH CEO - that no bills would be paid for 18 months while the hospital attempted to right its financial fallout.Creditors were also told that about a half-dozen vendors were owed more almost $500,000 each, including Quorum Health Resources, the hospital management firm that employed Gregson and Dan Jessup, the former SPMH CFO.Creditors were also told that the hospital’s bookkeeping was hard to decipher with some debts much higher than believed and others lower.County Supervisor Kathy Long had been urging that the hospital consider filing bankruptcy in months past while an affiliation agreement was being negotiated.Although talks between the county and SPMH faltered over financial disclosure and control of the hospital’s 29-acre hilltop property, among other issues, a meeting is scheduled for Jan. 6th.
SP Memorial Hospital files for Chapter 11 bankruptcy protection
December 26, 2003
Santa Paula News
Santa Paula Memorial Hospital filed for Chapter 11 bankruptcy protection in a federal court in Santa Barbara on Monday, three days after closing the “Hospital on the Hill.”
By Peggy KellySanta Paula TimesSanta Paula Memorial Hospital filed for Chapter 11 bankruptcy protection in a federal court in Santa Barbara on Monday, three days after closing the “Hospital on the Hill.”“We had hoped to be able to reorganize informally by agreement with our creditors, but some of them were uncooperative,” according to a press release by SPMH Board Chairman Phillip Romney. “We had to secure the protection of the bankruptcy court so that we could continue to pay the employees who are still with us, some of whom will continue with us for some time.”Romney added that filing of Chapter 11 bankruptcy protection “will not affect our negotiations with the County or any other suitor that approaches us.”Under Chapter 11 reorganization, unless the courts rule otherwise, the debtor remains in possession of the business and in control of the operation and debtors and creditors are allowed considerable flexibility in working together. A Chapter 11 bankruptcy also makes possible the negotiation of payment schedules, restructuring of debt and granting of loans.The filing listed no creditors or claims but trustees have acknowledged debts of $7.5 million.A well-known bankruptcy attorney, Jay Michaelson, is representing the hospital in the action.
