Health Plan of the Redwoods Creditors To Receive 37 Cents on the Dollar, Federal Judge Rules
Creditors of the bankrupt insurer Health Plan of the Redwoods will receive an estimated 37 cents on the dollar, according to a fund distribution plan approved Friday by U.S. Bankruptcy Court Judge Alan Jaroslovsky, the Santa Rosa Press Democrat reports (Rose, Santa Rosa Press Democrat, 1/24). HPR, which covered about 78,000 local residents, filed for bankruptcy protection in May 2002 and ceased operations in October 2002. About 1,300 creditors filed $60 million in claims against HPR (California Healthline, 2/24/03). Jaroslovsky's approval is expected by the end of January to result in the release of more than $11 million to the creditors that contracted with the HMO for medical services. Another $2 million will be reserved for unresolved issues and administrative costs, officials said. Final distribution of funds is not expected for several months, according to HPR's acting CEO Rod Stroud, the Press Democrat reports. Ron Oliner, attorney for a committee representing HPR's creditors, said the group was satisfied with the distribution plan and noted that original estimates stated HPR would pay 23 to 37 cents on the dollar to creditors, the Press Democrat reports. HPR also is currently in negotiations to sell its interest in 11 parcels of land surrounding Warrack Hospital on which medical offices are built. The land is valued at $200,000 to $500,000, according to HPR attorney Sam Maizel (Santa Rosa Press Democrat, 1/24).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.