New Jersey hospital files for bankruptcy, blames state for troubles

Saint Michael's Medical Center in Newark, N.J., a subsidiary of Livonia, Mich.-based Trinity Health, filed for chapter 11 bankruptcy on Monday, according to a NJ Spotlight report.

Although Trinity Health has deep pockets, Saint Michael's is financially distressed. The hospital is on track to post a $24 million operating loss this year, according to the report.

The state has been considering the sale of the hospital to Ontario, Calif.-based Prime Healthcare Services since December 2012, and Saint Michael's says the extended consideration of the transaction is the chief reason for its bankruptcy filing.

Luis Leon, president of operations at Prime Healthcare, said, "We are hopeful that after hearing from the community and the employees at Saint Michael's, and in light of the most recent development, the state will act quickly to approve the sale and preserve this vital Newark institution," according to the report.

State officials said Saint Michel's is going through the same rounds of questions and answers as any facility going through the certificate of need process.

Saint Michael's has reassured patients that medical services at the hospital will not be disrupted during the reorganization process. Although the hospital sent notices to its 1,400 employees informing them that they could lose their jobs after 60 days, the hospital said it is not its intention to lay anyone off, according to the report.

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