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New York Bankruptcy Litigation Developments in Bankruptcy Law within the State of New York and the Second Circuit

St. Francis’ Hospital Files for Bankruptcy in the SDNY

Posted in Debtor Filings

Introduction

On December 17, 2013, St. Francis’ Hospital, Poughkeepsie, New York and its affiliated debtors and debtors in possession (collectively “St. Francis’ Hospital” or the “Debtors”) filed a chapter 11 petition for bankruptcy with the United States Bankruptcy Court for the Southern District of New York.  According to the Declaration of Arthur Nizza, D.S.W., the President and Chief Executive Officer of St. Francis’ Hospital, the hospital has been experiencing financial difficulties in a health care environment with increasing costs and decreasing revenues.

With continued declines in reimbursement from Medicaid and Medicare, the hospital could no longer continue in business as a stand-alone hospital, and accordingly development of a stand-alone reorganization plan is not feasible.  For an article relating to the St. Francis’ filing by Catholic New York, click here.  A discussion of the major creditors to be impacted by this filing by USA Today can be found here.

Objectives in Bankruptcy

The hospital intends to sell its assets as part of a court-approved sale process. Following any sale St. Francis Hospital will cease to exist as an independent entity.

According to the Petition, St. Francis’ estimated assets are valued at $10 million to $50 million.  The Debtors are represented by the law firm of Nixon Peadbody LLP, and the Judge assigned is the Honorable Cecelia G. Morris.  The case is proceeding under case number 13-37725 in the Southern District of New York.

Carl D. Neff is a bankruptcy attorney with the law firm of Fox Rothschild LLP.  Carl is admitted in the States of New York and Delaware and practices before the United States Bankruptcy Courts  in those jurisdictions.  You can reach Carl at (302) 622-4272 or at cneff@foxrothschild.com.