University General Health System files for bankruptcy

For-profit University General Health System, based in Houston, has filed for Chapter 11 bankruptcy protection.

The system filed for bankruptcy to "facilitate an operational and financial restructuring," according to a news release.

The news comes after the system announced it was closing 111-bed University General Health-Dallas in December 2014. The system acquired the hospital in 2012, but the facility never achieved profitability.

"The filing was a difficult decision, but one that the board believes will allow the company to focus on improving operations at its flagship Houston hospital and creating a stronger financial foundation upon which to building its comprehensive strategic plan," said Hassan Chahadeh, MD, chairmen and CEO of University General Health System.

MidCap Financial Trust will provide debtor-in-possession financing to fund ongoing operations, according to the release.

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