Interfaith Medical Center, a hospital located in Brooklyn, will shut down January 2014. The closure follows about a month of negotiation between the medical center’s creditors and unions along with New York officials and the center’s managerial staff. Interfaith hospital had filed for bankruptcy December 2012, but the negotiation was unable to come to an alternative solution for the closing of the hospital.
The board of executives at the hospital attempted to keep the medical center open at least throughout the holidays as transferring patients during the season could prove difficult. Some of Interfaith’s outpatient services have already been approved for transfer to another medical center in good standing. More than 1,000 workers were to be laid off, and a large majority of them were union employees.
Interfaith Medical Center had reported large losses due to operations in its financial disclosures. Since the medical center filed for Chapter 11 bankruptcy, it reported nearly $30 million in losses due to operations, ending with nearly $200 million in liabilities after all of the center’s assets had been calculated. The hospital had already paid more than $9 million in legal fees to handle its lengthy bankruptcy case.
Companies such as the Interfaith Medical Center that are not in good financial standing can file for Chapter 11 bankruptcy to possibly help alleviate debts and restructure a business while keeping ownership of a company and continuing to operate. A bankruptcy lawyer may be able to assist companies in explaining the paperwork involved, the process of filing for Chapter 11 bankruptcy and the potential outcome of filing.
Source: Crain’s New York Business, “Mediation fails to keep Interfaith hospital open“, Barbara Benson, December 20, 2013by