New Jersey hospital uses Chapter 11 to solve financial problems

The recession has impacted many business entities in New Jersey over the past few years, including those providing medical services. One area of concern up in Hudson County is what is perceived as a glut of hospital space that has left three hospitals seeking financial relief. One of them, Christ Hospital, filed for Chapter 11 bankruptcy protection during the week of Feb. 6.

That action provides the hospital with the opportunity to present a financial plan to stay in business under the auspices of the court while keeping creditors at bay. In the meantime, efforts are under way to solve the hospital's economic crisis through a sale or merger with other nearby institutions.

Christ Hospital is not the only medical center in financial trouble in Hudson County. Jersey City Medical Center and Hoboken University Medical Center have suffered similar setbacks, and a study disclosed that the three institutions combined have created a situation where each is operating at less than full inpatient capacity. Part of the reason for this problem appears to be that the hospitals duplicate many services, and it was previously suggested that the three centers merge to streamline and consolidate all services offered to the community.

Indeed, Christ Hospital had been in negotiations with a for-profit healthcare facility from out of state to sell. When that transaction fell through, it resorted to the Chapter 11 filing in order to protect its financial interests while it devised a plan for consideration and approval by the court.

Speculation has surfaced that this action may actually lead to a solution between several entities to combine services and create a stronger and more profitable organization. Hoboken University Medical Center was sold by the City of Hoboken to the Bayonne Medical Center. Now there is talk that Christ Hospital and Jersey City Medical Center may be a good fit to consolidate and regionalize the medical services each offers. While it remains to be seen what the final outcome will be, it appears clear that the Chapter 11 filing has created breathing space for hospital administrators as well as an opportunity to both remain in business and solve its financial headaches.

Source: NJ Spotlight, "Hospitals' bankruptcy stokes talks on merger in Hudson County," Beth Fitzgerald, Feb. 8, 2012

1 Comment

This is alarming, how about the patients that are currently confined there? What will happen to them while the hospital's bankruptcy case is on going?

Leave a comment
Comment Information
EMAIL US FOR A RESPONSE

Get Our Help Today

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Office Locations

Cherry Hill Office
1060 North Kings Highway,Suite 333
Cherry Hill, NJ 08034

Toll Free: 800-759-0767
Phone: 856-254-2196
Fax: 856-414-1230
Map & Directions

Philadelphia Office
Suite 1505
1515 Market Street
Philadelphia, PA 19102

Toll Free: 800-759-0767
Phone: 215-928-9199
Map & Directions

Mount Holly Office
1848 Burlington-Mount Holly Rd
Mount Holly, NJ 08060

Toll Free: 800-759-0767
Phone: 856-254-2196
Map & Directions

Philadelphia Office
7909 Bustleton Avenue
Philadelphia, PA 19152

Toll Free: 800-759-0767
Phone: 215-928-9199
Map & Directions