- The Washington Times - Wednesday, April 11, 2007

The parent company of Prince George’s Hospital has a $4.7 million pension payment looming Monday, one day before company directors will decide whether to close or file for bankruptcy.

Moody’s Investor Services is watching to see whether Dimensions Healthcare System can make the payment as it decides whether to further downgrade the company’s bonds, according to a recent analyst’s report.

“At this point, management is considering all options and their consequences with respect to the $4.7 million pension payment that is due,” said Paul Blackwood, vice president of planning for Dimensions. “We anticipate having discussions about this matter with the Pension Benefit Guaranty Corporation.”

The pension payment already had been deferred under an agreement with the Internal Revenue Service.

“Recent operating performance has deteriorated dramatically,” Moody’s analyst Bruce Gordon wrote in a recent report placing Dimensions on a watch list for debt-rating downgrade.

“We will review the rating within the next 90 days, with a particular focus on [Dimensions’] ability to make its required $4.7 million pension payment due on April 15, 2007,” the report noted.

The pension crisis at Dimensions is at the root of many problems related to the company’s collapse. It also was a key stumbling block in negotiations over a potential state-and-county bailout.

Maryland and county officials had brokered a deal worth hundreds of millions of dollars to transfer operations to a government-backed hospital authority, but the Prince George’s Council balked at the arrangement as the 2007 Maryland General Assembly ended Monday.

The council was in part concerned about county taxpayers potentially being held liable for Dimensions’ pension liabilities, which total about $60 million.

County officials also havebeen trying to find a new operator. Among the possibilities was Doctors Community Hospital in Lanham, but state officials have criticized the plan.

The chief executive for Dimensions, G.T. Dunlop Ecker, has essentially ruled out bankruptcy as an alternative to closure, saying the health care system has only three days worth of cash on hand and cannot afford the move.

A review of Dimension’s monthly financial statements shows the company has averaged more than two weeks worth of cash on hand over the past six months, including 18 days for February. In January, the health system had 16 days’ cash.

The potential closure of Dimensions has created a backlash among lawmakers. Yesterday, U.S. Rep. Albert R. Wynn, Maryland Democrat, called for renewed talks between the County Council and County Executive Jack B. Johnson, a Democrat, to avoid closure.

“The burden of the hospital’s closure would adversely impact the surrounding hospitals in the region by straining the public health system,” Mr. Wynn said.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide