Alta District Hospital Files for Chapter 9 Bankruptcy

As expected, financially troubled Alta District Hospital in Dinuba filed for Chapter 9 bankruptcy protection Tuesday in U.S. bankruptcy court, the Fresno Bee reports. According to David Jenkins, a Fresno bankruptcy lawyer handling the filing, the hospital owes creditors between $4 million and $5 million. Jenkins said that the move will allow hospital officials to "figure out what they can afford to do" while the facility reorganizes. Under Chapter 9 of the federal bankruptcy code, petitioners receive protection from creditors while they develop a "debt-repayment plan." Jenkins said that Alta District has 992 creditors, including the Internal Revenue Service, PMPM Consulting Group Inc., the city of Dinuba and the Central California Blood Center. "The chances we will be able to put together a plan where creditors will get paid in full are very slim," Jenkins said, but he added that creditors will likely "end up getting paid something." Hospital officials "blame" the facility's financial problems on low Medi-Cal and Medicare reimbursement rates. In addition to filing for bankruptcy, hospital officials plan to eliminate 36 jobs and end "costly" programs, such as emergency services, which will close tomorrow. Officials also plan to expand or add programs that "have the potential to bring in additional revenue," according to Becky Willems, chair of Alta District's board of directors (Correa, Fresno Bee, 8/22).