A bankruptcy judge approved a deal for Springfield (Vt.) Hospital to emerge from bankruptcy, about a year and a half after filing for Chapter 11 protection, according to the VTDigger.
Springfield Hospital and Springfield Medical Care Systems, a group of associated health clinics, filed for bankruptcy in June 2019 after several years of operating losses and a debt load that reached about $20 million. The hospital and clinics attributed the losses to revenue declines, increased employee costs and expanding services that were not profitable.
Under the deal approved by a bankruptcy judge, creditor Berkshire Bank agreed to accept $4 million out of the $9 million it loaned the hospital and associated medical clinics. Springfield Hospital and Springfield Medical Care Systems will pay $2 million each this month.
Springfield Medical Care Systems will split from the hospital after bankruptcy.
The hospital will leave bankruptcy with about $9 million in debt, including $4 million owed to CMS, which overpaid the hospital in 2019, and $5 million to the Vermont government, according to the report.
The hospital and clinics are expected to leave bankruptcy before the end of the year.