CHARLESTON, W.Va. — Two Kanawha County hospitals will continue to operate while their parent company works its way through Chapter 11 bankruptcy.
A First Day Motions hearing was held Wednesday afternoon in U.S. Bankruptcy Court in Charleston in the Thomas Health Systems case. Thomas, which operates both Thomas Memorial Hospital in South Charleston and Saint Francis Hospital in Charleston, filed for protection from its creditors last Friday.
U.S. District Judge Frank Volk, who is also serving as the U.S. bankruptcy judge for the southern district, heard motions on the case from the system’s bankruptcy attorneys and attorneys representing Thomas’ creditors.
The attorneys told Volk there have been ongoing negotiations between Thomas Health System and its largest creditors over the last few days and there’s at least some general agreement for the time being.
Thomas Health System President and CEO Dan Lauffer told reporters after the hearing bankruptcy is a process and there are a lot of issues that will have to be negotiated.
“In short, these are motions just allowing the hospital to continue to operate in this Chapter 11, that’s what it is,” Lauffer said. “Thomas Health is in the process of trying to restructure its long-term debt. The hospital is operational today. This doesn’t affect any of our employees or their benefits. Patients need to know the hospital is open for business and we hope we can get through this very soon.”
Lauffer said they continue to meet with employees about what’s happening.
“We’ve had town hall meetings with our employees. We’ve had town hall meetings with our physicians. Everybody is aware and everybody feels like we are working toward the right goal of restructuring our long-term debt,” Lauffer said.
Thomas has approximately 1,700 workers.
Thomas Health has listed its debts between $100 million and $500 million and its assets between $1 million and $10 million. Its largest creditor are bond holders connected with construction projects at Thomas Memorial Hospital during the past decade. Bankruptcy allows Thomas to stop payment to creditors while the reorganization is taking place.A lot of the system’s debt is from construction projects and property purchases. The hospitals have also been hurt by an increasing number government-insured patients compared to patients that carry commercial insurance. Thomas said last week high deductibles are also impacting their patients. The hospital has negotiated payment plans in many cases.
One of the attorneys for the bond holders told Volk they’ve taken a measured approach to the filing and had reached agreement with Thomas on all first day motions. He told the judge they reserved the right to object to developments in future hearings.
“We support the effort to maintain a stable business,” the attorney said.
Lauffer said that’s what he wants the community to know.
“This is something that people need to grasp that we are not in any way affecting operations. The same services are being provided today as they were last week, last month and we feel we can get through this,” Lauffer said.
Volk indicated he would rule on a number of first motions by Wednesday night.