Aug 14, 2008 5:38 pm US/Pacific
San Pablo Hospital Emerges From Bankruptcy
SAN PABLO (BCN) ―
A plan for the agency operating Doctors Medical Center in San Pablo to emerge from bankruptcy protection was approved by a federal bankruptcy judge in Oakland on Thursday.
The plan by the West Contra Costa Healthcare District, which operates the hospital, was approved by Bankruptcy Judge Leslie Tchaikovsky.
Contra Costa County Supervisor John Gioia said, "This is an important day for the hospital, its physicians, employees and the community.
"Emerging from bankruptcy means West County will continue to have a vital emergency room and health care facility," the supervisor said.
Gioia, who represents the western part of the county, is chair of a Joint Powers Authority created by the county and the healthcare district after the district filed for Chapter 9 bankruptcy protection on Oct. 1, 2006.
The Chapter 9 procedure enables a municipality or government district to be protected from debts while it develops a financial reorganization plan.
Gioia said unsecured creditors will be repaid about 40 percent of the $20 million in debt owed to them over four years. Secured creditors will be paid in full and employees were paid most or all of their salaries during the bankruptcy, he said.
Gioia said a key element in stabilizing the hospital financially was a $10 million transfer from the county in 2006. That funding, which is being paid back to the county with district tax revenue, leveraged another $10 million in state and federal funds. The hospital also received grants from Kaiser Permanente and John Muir hospitals.
The reorganized hospital has 220 beds including 26 emergency room beds in the largest emergency facility in the western part of the county, the supervisor said.
Joe Stewart, who was appointed as chief executive officer of the hospital earlier this month after being named interim CEO last year, said, "With our finances in order, we can focus our attention on new initiatives such as upgrading our cancer treatment services and maintaining patient care as our highest priority."
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