Bankruptcy Court Judge Approves Health Plan of the Redwoods Liquidation Plan
U.S. Bankruptcy Court Judge Alan Jaroslovsky on Friday approved a final liquidation plan for Health Plan of the Redwoods, the Santa Rosa Press Democrat reports (Rose, Santa Rosa Press Democrat, 12/14). Faced with an $8 million budget deficit since Jan. 1, HPR filed for federal Chapter 11 bankruptcy protection on May 31. HPR officials estimate that the health insurer owes $38.7 million to creditors, which include local hospitals, physicians and other health care providers. HPR officials in August announced plans to liquidate and shut down by Oct. 31 (California Healthline, 11/19). Under the liquidation plan, approved by creditors earlier this month, HPR will pay 23 cents to 27 cents per dollar owed to creditors (Santa Rosa Press Democrat, 12/14). However, HPR will not determine the exact amount repaid to creditors until January, the deadline for HPR members to file medical and legal claims related to the health insurer's decision to end operations (California Healthline, 11/19). HPR officials said that creditors will not likely receive payments until December 2003. According to Samuel Maizel, an attorney for HPR, a board of representatives from a 13-member committee of HPR creditors and the current HPR board will oversee the liquidation plan (Santa Rosa Press Democrat, 12/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.