2 Arizona hospitals abruptly close after entering bankruptcy

Gilbert (Ariz.) Hospital and Florence (Ariz.) Hospital at Anthem, both owned by Gilbert-based New Vision Health, provided little notice before shutting down.

The two hospitals entered Chapter 11 bankruptcy in late May after creditors filed involuntary bankruptcy petitions for the hospitals, seeking to collect $1.96 million they claim the hospitals owe.

Involuntary bankruptcy is a legal proceeding used by creditors who feel they will not be paid unless a company enters bankruptcy. In court documents filed May 1, creditors claimed the two Arizona hospitals failed to make lease payments for months and that the facilities are "on the brink of complete shutdown."

After creditors ask the court to initiate bankruptcy proceedings, the debtor has the opportunity to contest the petition. The two Arizona hospitals failed to contest the petition within the required 21-day timeline, and the court subsequently granted creditors' request for relief through the Chapter 11 bankruptcy process.

The financial troubles forced the two hospitals to close. After initially announcing the two facilities would close June 15, officials slightly extended the timeline. Gilbert Hospital closed June 16 and Florence Hospital closed June 18, according to azcentral.

"I'd like to stress that patient care was never in jeopardy, but the ability to sustain the minimum level of operations was simply too great of a financial burden moving forward," Jeremiah Foster, a receiver in the bankruptcy case, said in a statement.

This is the second time Gilbert Hospital and Florence Hospital have landed in bankruptcy court. The hospitals filed for voluntary Chapter 11 bankruptcy in 2014, according to court documents.

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