A judge will soon rule on Hollister, Calif.-based Hazel Hawkins Memorial Hospital's Chapter 9 bankruptcy eligibility, the Hollister Free Lance reported Jan. 3.
U.S. Bankruptcy Court for the Northern District of California Judge Stephen Johnson will determine the validity of the financial emergency hospital administrators cited as the reason for filing for bankruptcy, according to the report.
San Benito Health Care District, the board overseeing Hollister, Calif.-based Hazel Hawkins Memorial Hospital, voted May 22 to file for Chapter 9 bankruptcy. A hospital spokesperson said the filing will allow it to "deal with larger issues we just can't tackle outside of Chapter 9." The decision came after the board declared a fiscal emergency in November 2022.
A trial was held in December after the California Nurses Association objected to the board's argument that Hazel Hawkins is financially insolvent, according to the report. The association represents more than 100 nurses employed by the hospital, and representatives have said that cuts made to address the fiscal emergency contributed to a decline in patient care quality.
Lawyers for the nurses association argued that the hospital is currently solvent and the health district is able to pay its current debts and debts through at least the fiscal year ending June 30.
A Hazel Hawkins spokesperson told the news outlet that they feel they presented a strong case and await the judge's decision. He said the decision to go into Chapter 9 was not taken lightly and allowed more time to find a partner or buyer and is one of the main reasons the hospital remains open.
Chapter 9 allows financially distressed cities, hospital districts and other public entities protection from its creditors while it develops and negotiates a plan for adjusting its debt.