Brentwood, Tenn.-based Quorum Health, which operates 24 hospitals across the U.S., is preparing Chapter 11 bankruptcy plans as COVID-19 puts pressure on hospital operators' finances, according to Bloomberg.
The company, a spinoff of Franklin, Tenn.-based Community Health Systems, is preparing for a potential bankruptcy filing and exploring a variety of other deals, sources told Bloomberg. In a March 31 filing with the Securities and Exchange Commission, Quorum explained why Chapter 11 bankruptcy is being considered.
"The company, together with its financial and legal advisors, has been engaged in discussions with certain debt holders regarding a recapitalization or financial reorganization transaction, which may include the voluntary filing of chapter 11 cases under the U.S. Bankruptcy Code, to address the company's current liquidity needs while providing for continuity of patient care and the ordinary course operations of hospitals," the SEC filing states.
In a March 31 press release, Quorum Health President and CEO Robert Fish said the company is "engaged in constructive discussions" with debt holders about a potential recapitalization or reorganization transaction.
"Regardless of the path forward the company chooses, Quorum Health and its hospitals will continue to maintain all operations without any interruption to service," Mr. Fish said. "Our facilities play a critically important role in their communities and the fight against COVID-19. We are intensely focused on ensuring our employees have the resources they need to provide quality care to the patients and communities they serve, now and well into the future."
Quorum announced March 31 that it is delaying its annual report for the fiscal year ended Dec. 31. The company attributed the delay to ongoing negotiations with the company's debt holders, which have "diverted significant management time and internal resources from the company's normal processes for reviewing and completing its financial statements and related disclosures."
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