‘Renewed interest’ by potential partners delayed Madera hospital’s bankruptcy filing
An attorney for Madera Community Hospital shared new details about the hospital’s delay in filing for bankruptcy, saying there was “renewed interest” by potential partners and the hospital had hoped it wouldn’t have to file for Chapter 11.
Initially, the Madera hospital said it was going to “file bankruptcy on January 3, 2023 at 12:00 a.m.,” the same day the hospital closed.
“Around Jan. 3 there was renewed interest by possible suitors and it was decided to postpone the filing in the hope a deal could be put together that would avoid need to file Chapter 11,” attorney Riley Walter told The Bee in an email.
Walter said he was not “at liberty to discuss names of suitors,” but some of them had shown an interest in the past.
Hospital officials, he said, had hoped a bankruptcy filing wouldn’t be needed, after all.
“The filing of the petition and layoffs are not connected,” he said. “The hospital had no funds with which to pay employees or suppliers so it shut down. A new operator or owner would need to reengage with laid-off employees.”
Jerry Lowe, a bankruptcy attorney in Fresno, earlier this week told The Bee the Madera hospital “certainly could have” filed for bankruptcy without having to lay off the majority of its staff.
After plans with potential suitors didn’t come through, the hospital now plans to file for bankruptcy “soon,” Walter said, without providing a date.
The Madera hospital continues to employ more than 30 workers as of Friday, including its Chief Executive Officer Karen Paolinelli.
During a community event Thursday night, Stell Manfredi, vice chair of the Madera Community Hospital board, told those in the audience that the hospital owed former employees about $2 million, but it will be going toward bankruptcy, according to a Fresnoland documenter who live-tweeted the event.
“I am sitting here and embarrassed that we cannot pay our former employees,” Manfredi said, according to the live tweets.
Walter wouldn’t say how much the hospital is paying to file for bankruptcy and to maintain the hospital, noting details will become public “when the Chapter 11 is filed.”
This story was originally published March 4, 2023 at 10:48 AM.
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