By John George – Senior Reporter,
Philadelphia Business Journal
Jul 1,
2019, 7:42am EDT Updated Jul 1, 2019, 2:02pm EDT
Philadelphia
Academic Health System (PAHS) and certain of its subsidiaries – including
Hahnemann University Hospital and St. Christopher’s Hospital for Children, and
their related physician practice groups – have voluntarily filed for Chapter 11
protection in the United States Bankruptcy Court for the District of Delaware.
PAHS, a
subsidiary of American Academic Health System (AAHS), announced plans to close
Hahnemann last week. The system said it has no plans to close St.
Christopher’s.
“Today’s
action will ensure an orderly wind-down of the operations of Hahnemann, while
assuring patient safety,” said Allen Wilen, chief restructuring officer for
PAHS. “It will also facilitate a restructuring of St. Christopher’s, which will
enable it to remain in full operation.
“Let me
be clear; this was not our first choice,” Wilen added. “For months leading up
to this announcement, PAHS held dozens of meetings with various parties, seeking
funding and a way for Hahnemann to remain open. Unfortunately, none of these
efforts resulted in a viable financial solution.”
Wilson
said the system is working with the Pennsylvania Department of Health to ensure
a smooth transition of patients and services, and patient safety is a top
priority in the process.
The
bankruptcy filing list debts for the hospitals and affiliated entities of
between $100 million and $500 million and assets of between $10 million and $50
million. The largest unsecured creditors are Tenet Business Services Corp. of
Dallas, Texas, which is owed $20.2 million; Conifer patient Communications of
St. Petersburg, Fla., which is owed $19.1 million; and Drexel University, which
is owed $14.2 million.
The
bankruptcy filing does not include the properties on which the Hahnemann and
St. Christopher's hospital, and their affiliated care providers, sit. Those
properties are owned by a separate subsidiary of AAHS. AAHS acquired the
hospitals and properties from Tenet Healthcare Corp. for $170 million in
January 2018.
Saul
Ewing Arnstein & Lehr is serving as restructuring counsel for PAHS. SSG
Capital Advisors is serving as investment banker and EisnerAmper LLP is serving
as restructuring advisor for the health system.
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