California hospital weighs bankruptcy

Hollister, Calif.-based Hazel Hawkins Memorial Hospital will decide whether or not it will file a Chapter 9 bankruptcy case at the San Benito Health Care District board meeting on May 22, local news outlet KSBW reported May 16.

A November fiscal emergency declaration authorized a Chapter 9 filing but the hospital district decided to focus on short-term financial stabilization and creditor negotiations, according to the report. In the last six months, it has recorded more than $11 million in cost savings, loans and prepayments to support the district through summer.

Chapter 9 allows financially distressed cities, hospital districts and other public entities protection from its creditors while it develops and negotiates a plan for adjusting its debt, according to the U.S. Courts. 

In this instance, the hospital district would be able to continue operations without disruption, including caring for patients, operating its facilities, and making payroll, according to the report. The hospital district is continuing cost-saving efforts ahead of a potential strategic partnership with a larger entity.

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