North Philadelphia Health System Files for Chapter 11 Bankruptcy

by San Antonio Attorney

North Philadelphia Health System sought for bankruptcy protection after a long time of financial struggles.

NPHS, which provides services to some of the most destitute communities in Philadelphia, took several steps in aimed at improving finances, like obtaining a revolving credit line of $8.5 million to settle debt in 2011.

After ending the 2013 fiscal year with $104,000 net income, the healthcare provider took additional steps to be free of debt.  But the system finished FY 2014 with $1.4 million net loss, based on a report from the Pennsylvania Health Care Cost Containment Council.

The healthcare provider attempted to get back on its feet in 2015.  It sold an unused building and parking lot and generated $4.5 million.  The proceeds from the sale were used to pay some of the debt incurred to fund St. Joseph’s Hospital’s new emergency department.

After the state of Philadelphia decided to lessen its financial assistance for NPHS for taking care of mostly uninsured and poor residents, the healthcare provider decided to shut down St.  Joseph’s Hospital in March 2016.  A total of 675 people lost their jobs.

NPHS still had problems even after shuttering St. Joseph’s, causing it to file for Chapter 11 bankruptcy on Dec.  30.  NPHS’s bankruptcy petition stated $10 million to $50 million in liabilities, and the same range in assets.  The healthcare provider said in its filing that it has at around 1,000 creditors.

NPHS filed a request to the bankruptcy court to issue a restraining order that would prevent utility companies from cutting services, as it needs continuous utility service to take care of patients.  The healthcare provider also asked permission to retain employees’ present salaries and benefits.  A court hearing on that motion is slated for Jan.  5.

NPHS presently runs two hospitals in Philadelphia: Girard Medical Center and Goldman Clinic.


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