1999-11-13 / Front Page

Bankruptcy Near?

By John McLoughin

Episcopal Health Services is one step closer to declaring bankruptcy, keeping the question alive, "What happens with St. John's Episcopal Hospital South Shore?"

According to reports, Corbett Price, CEO of EHS, spoke to doctors at a meeting on Monday, November 8, at Smithtown's St. John's Episcopal Hospital. Sources said that Price said EHS planned to file Chapter 11 of the federal bankruptcy laws, which would help the company reorganize.

Under Chapter 11, best known as a "protection clause", EHS would not have to pay all debts, but must honor current bills. Basically, the company pays what it can, not what it owes. A source said that this would be the "best bet for St. John's Episcopal Hospital South Shore," which would lead to restructuring and the "strengthening of St. John's as a viable institution in Rockaway."

Under the worse case scenario, a judge could deny Chapter 11 and ask for Chapter 7.

EHS plans to sell the Smithtown hospital for $94 million to Catholic Health Services. This sale would still be permitted under Chapter 11 bankruptcy.

Crisis Committee members of St. John's Episcopal Hospital in Far Rockaway told The Wave that "problems continue, but nothing has been officially filed." At this time, benefits and paychecks have not been affected.


 

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