Hospital files for Chapter 11 bankruptcy

A hospital in another state recently decided to file for bankruptcy. The facility filed for Chapter 11 bankruptcy in an effort to buy itself some time to stay in businesses and re-organize itself. This type of bankruptcy filing in Massachusetts can be helpful for health care facilities and other businesses that are battling continual financial struggles.

In the recent out-of-state case involving the hospital, part of the reason for the hospital’s ongoing financial issues was many lawsuits. With the Chapter 11 bankruptcy filing, the hospital is able to get some much-needed breathing room, as the filing essentially puts all legal claims on hold. The hospital has also been facing some other financial giants; for instance, it has had some issues with the IRS regarding payroll tax deduction-related problems. In the past, the hospital was almost about to shut its doors before it was able to reach a last-minute agreement with the management company that ended up taking over its operations and helping it to resolve the IRS issue. However, their relationship quickly soured, leading to litigation issues.

The hospital is continuing to operate following its recent bankruptcy filing. The leadership of the medical facility is reportedly striving to keep as many job positions as possible. However, it may be unavoidable to make some job cuts.

Sometimes companies in Massachusetts get into financial trouble for a range of reasons, including unpreventable and unforeseen market changes. Fortunately, businesses owners do not have to struggle alone. With Chapter 11 bankruptcy protection, they can take the time needed to re-organize their debts and start anew financially without having to close their doors.

Source:, “Campbellton-Graceville Hospital files Chapter 11 bankruptcy“, Deborah Buckhalter, May 10, 2017