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SOUTH CAROLINA
BANKRUPTCY ATTORNEY

County hospital files for Chapter 7

A hospital run by a not-for-profit agency is closing its doors this month, according to local business sources. Chapter 7 bankruptcy is a useful way for a struggling business to discharge debt, as some South Carolina owners can attest. In the case of this hospital, "insurmountable financial challenges" have led hospital administrators to move for bankruptcy in advance of rising debt.

Of the 18 beds offered by the hospital, only three remained filled as of May 13, a day after the hospital stopped providing emergency services. Those three beds were vacated by day's end, with all three remaining patients transferred to other hospitals in the area. The hospital's 44 full-time and 40 part-time employees were to be laid off by the following Friday. Thankfully, the hospital reported those employees would be paid up until that time.

There is no word as to how much debt the hospital faces, but the not-for-profit parent company has suggested the financial condition is dire. It credited the tenacity and dedication of the support staff to the hospital's ability to stay open as long as it had, but in the end the pressure of its debt became too heavy to continue carrying. Administrators have suggested part of the issue may have been a general trend toward urbanization that leaves many rural hospitals without sufficient patients to support them.

A Chapter 7 bankruptcy is sometimes the best decision an administrator or business owner can make. While South Carolina owners are aware it can be a challenging transition, the ability to liquidate company assets to pay off debt can provide protection for the personal assets of the owners. With luck, this means the owners will be able to return to the market with a more financially stable footing.

Source: kentucky.com, "Nicholas County Hospital announces closing, to file for bankruptcy", Karla Ward, May 12, 2014

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