SPRINGFIELD, Vt. (AP) - Springfield Hospital and its associated Springfield Medical Care Systems submitted a plan for a bankruptcy bailout funded by the state of Vermont that would have them move forward as separate organizations.
The hospital and clinics, which employ around 600 people, proposed in a filing in a Burlington court on Friday to separate from each other but cooperate in coming out of bankruptcy, the Lebanon Valley News reported.
The plan relies on $6 million in “exit funding” from Vermont’s budget and writing off $4.65 million in unpaid taxes, the newspaper reported. The funding is included in the budget that the state legislature will vote on this week.
Springfield Hospital and Springfield Medical Care Systems, a network of clinics in Springfield, Londonderry, Ludlow, Chester, Rockingham and in Charlestown, New Hampshire, filed for bankruptcy in June 2019 with some $20 million in debt.
While the organizations are proposing to separate, they signed a master shared services agreement in July, the newspaper reports. The hospital and clinic network have shared clinic and administrative services for about a decade.
“We’ve been working together for a good 10 years now,” Mike Halstead, the hospital’s interim CEO, said in an interview. “That organization provides the primary care services that an acute care hospital needs to have. It’s vital that we work together.”
If approved, the bailout would allow the two healthcare providers to pay back some of their debts to Berkshire Bank, People’s United Bank and the Centers for Medicare & Medicaid Services. It would also continue the provision of healthcare services, including the operation of 25 acute care beds, largely as they have been.
The bailout promises to return $5 million to the state over 20 years and make the state “first priority security interest and mortgage” on all of the hospital’s assets, the newspaper reported. Additionally, the bailout preserves current and former employees’ pensions and would repay a variety of other debts.
The hospital’s debtors will be able to weigh in on the proposed bailout at a hearing on Oct. 23.
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