Governor signs bankruptcy bill
Published 12:00 am Tuesday, April 1, 2008
NATCHEZ — With the stroke of a pen Gov. Haley Barbour signed Bill 3186 Monday evening, allowing Natchez Regional Medical Center to legally declare bankruptcy.
In February, the hospital revealed it had large-scale financial troubles.
Since then, the hospital’s administrative staff has been restructured and all employee salaries have been cut by 5 percent.
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Later, the hospital’s board of trustees announced plans to pursue bankruptcy as a means to halt the hospital’s downward financial spiral.
Board members said a Chapter 9 bankruptcy declaration would allow the hospital to keep creditors at bay while exploring other means of righting the hospital. However, the hospital could not legally declare bankruptcy until the bill allowing bankruptcy was signed into law.
On Monday the board got its wish.
In March, the board hired Eileen Schaffer, an attorney specializing in bankruptcy law in anticipation of the governor’s approval of Bill 3186.
Schaffer said it’s unfortunate for the hospital that bankruptcy has such an unfortunate connotation.
“This is a positive step for the hospital,” she said.
Schaffer said bankruptcy will allow the hospital to restructure payments of its debts while still offering high quality care to the community.
“Things will be business as usual,” she said.
In addition to debt restructuring, the hospital will also have an opportunity to review current leases and contracts with the option of cancellation if necessary.
“Some (contracts) may need to be rejected to move forward,” she said.
Hospital board attorney Walter Brown said some time this week the board will likely vote to allow Schaffer to file a petition in bankruptcy court for the proceedings to continue.
Once the petition is filed the courts will set a date for the hospital to submit its bankruptcy plans.
Brown said the hospital could have as much as three to six months to submit a plan.
The plans essentially outline the hospitals plan to pay creditors during restructuring.
“This is the first step in turning the hospital around,” he said.
And while the hospital is just starting its turn around, Brown credits legislators with making it happen so quickly.
Bill 3186 went from bill to law in just 19 days.
Brown said aside from emergencies he has never seen a bill become law so quickly.