Green Valley (Ariz.) Hospital filed for Chapter 11 bankruptcy April 3. In its bankruptcy documents the hospital says it was "poorly managed" and "undercapitalized" since it opened less than two years ago, according to the Green Valley News.
The 49-bed for-profit hospital filed for bankruptcy to strengthen its financial performance and restructure its debt. "This is merely a procedural step, and to be sustainable we have to take this step to reorganize our finances and alleviate some of our debt burden," hospital CEO John Matuska told the Arizona Daily Star.
The hospital said in its bankruptcy documents that it recruited a team of managers in August that was tasked with reversing the hospital's financial downturn. However, the hospital was pushed into bankruptcy due to its unsustainable debt load, according to the Green Valley News.
In its bankruptcy petition, Green Valley Hospital listed its liabilities as about $95 million. The hospital said it owes a combined $1.07 million to 34 "critical vendors," which provide services and supplies to the hospital that are necessary for it to operate.
Two of the "critical vendors" — Tucson, Ariz.-based Pima Heart and Southern Arizona Gastroenterology in Tucson — have indicated they will stop providing services to Green Valley Hospital if it fails to honor repayment plans made prior to its bankruptcy filing. To maintain those services, hospital management has agreed to repay the $305,000 it owes Pima Heart in three equal payments in April, May and June. The hospital owes Southern Arizona Gastroenterology $23,300 and plans to pay off the debt by May 1, according to the report.
Green Valley Hospital will operate as normal as it restructures its debt and no layoffs are expected.
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