Santa Paula Memorial Hospital May Have To Liquidate Assets To Pay Debt
Santa Paula Memorial Hospital might have to liquidate assets to pay its debts because negotiations between the hospital board and Ventura County have been unproductive, hospital administrator Gene Kaberline said Tuesday at a bankruptcy hearing at the U.S. Trustee's Office in Santa Barbara, the Ventura County Star reports (Wilson, Ventura County Star, 3/31). Negotiations between the hospital and Ventura County began in June 2003 to make Santa Paula Memorial -- a 49-bed facility that operated the only emergency department between the cities of Santa Clarita and Ventura -- part of the county health care system and to allow the hospital to remain open. In December, the hospital's board of trustees filed for Chapter 11 bankruptcy protection in federal court in Santa Barbara, three days after the board closed the facility. Documents filed with the court listed no claims or creditors, but board members have said that not-for-profit Santa Paula Memorial has debts of about $7.5 million and about 400 creditors. Last month at a bankruptcy hearing, hospital trustees said that they plan to offer Santa Paula Memorial and its property for general sale in less than 90 days unless a party steps forward to reopen the hospital. In addition, the Santa Paula City Council last month said that unless an agreement to reopen the hospital is reached by May 3, the council will consider takeover options, including the removal of the hospital board and condemnation of the land (California Healthline, 3/23). Kaberline said negotiations with the county have "dragged on for so long he didn't expect anything to materialize over the short term," the Star reports. The hospital has had to pay bills for obligations such as malpractice insurance premiums and last week had to close two outpatient clinics in Fillmore and Santa Paula because it had no funds for payroll. "We really are on the road to liquidation," Kaberline said. Hospital attorney Jay Michaelson said, "We don't have the luxury with limited assets of waiting to see if negotiations that have so far been fruitless will bear fruit" (Ventura County Star, 3/31).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.