Casa Grande (Ariz.) Regional Medical Center filed for Chapter 11 bankruptcy yesterday, a maneuver executives said was needed to complete its sale to Phoenix-based Banner Health.
The 177-bed CGRMC filed for bankruptcy under an asset purchase agreement it signed with Banner. Financial terms of the deal were not disclosed. The APA builds off the letter of intent the two organizations signed in late December.
Executives at Banner and CGRMC said going through bankruptcy was the "best approach" to ensure the hospital's patients, employees and creditors were protected during the acquisition process. The groups will now conduct meetings and expect the bankruptcy court to approve the plan by May.
"The goal is to ensure that there is as little disruption as possible, and I have committed to our staff, doctors and community that I will keep them informed of developments every step of the way," Rona Curphy, president and CEO of CGRMC, said in a news release. "We are confident that activities associated with this acquisition will not disrupt the outstanding patient care that we will continue to provide."
Banner will provide interim funding to CGRMC until the deal closes. CGRMC, which would become Banner's 24th acute-care hospital, posted $13.4 million in operating losses last year. Declining volumes and high rates of uncompensated care were primary factors for the hospital's financial troubles.
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