Leaders of Dickinson County Healthcare System in Iron Mountain, Mich., motioned Sept. 25 to begin the process of filing for Chapter 11 bankruptcy — roughly one week after a sale deal with Marquette, Mich.-based UP Health System fell through, according to TV 6 News.
An attorney with the hospital board told the publication filing for bankruptcy will allow the 49-bed hospital to remain open and continue services.
"What's going to affect the timing of this is whether or not we can go into a Chapter 11 with a partner. The partner pretty much is already committed to a purchase price and what liabilities are willing to cover, so those things are being negotiated," Dickinson County Healthcare System Board Chairman Bill Edberg told TV 6 News.
Hospital officials said the institution is roughly $20 million in debt, but there is no immediate concern as to whether it will make payroll, as the hospital has $2 million in escrow.
"We have roughly $2 million in escrow with Fifth Third Bank that we are good for at least a couple of months, but again a lot of unknown in all of this," Mr. Edberg said.
With the potential bankruptcy filing, many employees and citizens expressed concern during the board's meeting Sept. 25, including concerns over pensions. The hospital is liable for about $17 million in unfunded pensions, the report states.
Despite concerns, hospital officials reiterated during the meeting that "care will continue to be provided, hospital will remain open and employees will continue to get paid," the report states.
The hospital board is scheduled to meet next on Sept. 27.
To access the full report, click here.