Montefiore St. Luke's Hospital in Newburgh, N.Y., is facing a potential financial crisis because lenders are calling in loans worth $40 million, President and CEO Joan Cusack-McGuirk told the Times Herald-Record.
Ms. Cusack-McGuirk said KeyBank is calling in a pair of loans worth $22.2 million, a move that she says led HSBC and Assured Guaranty to call in loans that are part of the same debt package. Bankruptcy and mass layoffs are possibilities if hospital officials are unable to get the banks to reverse course, Ms. Cusasck-McGuirk told the Times Herald-Report.
Though KeyBank can't discuss the specifics of the hospital's case because of client confidentiality, a spokesperson told the Times Herald-Report that "many of the facts as presented are inaccurate." The bank said it's working with the hospital to reach a resolution.
The financial institutions called in the loans after the hospital slipped into "technical default," Ms. Cusack-McGuirk said. In recent years, the hospital entered a forbearance because it violated its liquidity and cash flow covenants, according to the report.
Read the full Times Herald-Record article here.