PA Hospital Changes Course, Now Pursuing Chapter 7

According to the trustee report, the medical center:

• Rents its facility on a month-to-month basis but hasn’t paid the rent in three years
• Is in default on the leases for numerous pieces of medical equipment
• Owes at least $1.1 million in trust fund taxes
• Owes at least $30,000 for past due 401(k) payments

In addition, Schwab reports that he has been notified by attorneys representing the American Federation of State, County and Municipal Employees, District Council 89, AFL-CIO that "many of the employees have not received wages for five weeks, and payroll has not been made, and there will also be WARN Act claims."  The Worker Adjustment and Retraining Notification Act (WARN) requires most employers with 100 or more employees to provide at least 60 days notice of plant closings and mass layoffs.

Chance for Sale Bleak
The report notes that the trustee contacted four large regional hospital groups to gauge interest in a possible purchase of the medical center, but "because of the area of surrounding hospital systems, (the medical center’s) demographics and insurance mix, none have been interested in looking at the financials."