The U.S. Bankruptcy Court for the Southern District of Texas has approved El Segundo, Calif.-based Pipeline Health System's Chapter 11 plan, which will trim $330 million in debt, according to law360.com.
Pipeline filed for Chapter 11 Oct. 2, but expects to exit bankruptcy in the coming weeks, the system said in a Jan. 13 news release. The Chapter 11 approval is a significant step forward for Pipeline — which operated hospitals in Texas, California and Illinois — as it aims to emerge as a stronger and sustainable system.
In recent months, the system's executive leadership team and hospital CEOs worked through a restructuring process that included selling two Chicago hospitals, evaluating vendor contracts to ensure affordability, creating a business plan with realistic financial goals to balance its budget and securing financial agreements with key stakeholders to support its future.
Pipeline now operates one hospital in Dallas and four in the Los Angeles area.
In the coming weeks, key leadership changes will take place. CFO Bob Allen will become CEO, replacing Andrei Soran in the role. Joe Badalian, COO; Traci Bowen, chief human resources officer; and Bob Frank, MD, chief medical officer, will also step down from their roles to pursue other opportunities.
"We owe a debt of gratitude to our Pipeline corporate leaders, physicians, our hospital CEOs and management teams and others who have collaborated in this challenging restructuring process," Mr. Soran said in the release. "I am proud of the work we have done together."