Details about Heywood Healthcare's bankruptcy: 4 things to know
Details are emerging following the news on Monday that Heywood Hospital in Gardner had filed Chapter 11 bankruptcy protection. According to Heywood officials, the move was made with a focus on the long-term viability of the hospital.
Hospital officials have cited several reasons for the bankruptcy filing, including the pandemic, low reimbursement rates, a costly and lengthy electronic medical record transition, an aging infrastructure, and the current economic landscape.
According to the legal paperwork filed in connection with the bankruptcy, Heywood Medical Group is described as a tax-exempt health care business involved in its first bankruptcy case.
Heywood, as the debtor in the case, is facing between 200 and 999 creditors in the case. The group’s estimated assets and estimated liabilities are listed somewhere between $10 million and $50 million, according to documents filed with the court.
All Heywood affiliates are included in a single petition
Heywood Healthcare Inc. and its affiliates, including Athol Memorial Hospital, Heywood Medical Group, Heywood Realty Corporation, and Quabbin Healthcare, have been consolidated in a joint administration order for the purposes of the case. According to court filings, the consolidation is procedural only, and would not infringe on any creditor's rights.
"That order simply allows the seven Heywood entities to file their pleadings and motions under a single leading case number," said Attorney John Flick, who filed the bankruptcy petition on behalf of Heywood.
Who are Heywood's creditors?
A list of the 30 creditors with the largest unsecured claims against Heywood is included in the court filings. The creditors include: the Commonwealth of Massachusetts, with $6,000,000 in claims; the Chicago-based Stryker Orthopedics, which is seeking $2,339,337; National Grid in Pittsburg, which is seeking $465,653; the Mass Hospital Association, which is seeking $158,246; NC-based LabCorps of America, which is seeking $1,099,500; and Heywood Green Street LLC in Needham, which is seeking $2,945,097.
Creditor | Amount owed |
|---|---|
Commonwealth Of Mass. | $6,000,000 |
Heywood Green Street LLC | $2,945,097 |
Stryker Orthopedics | $2,339,337 |
Medefis Inc | $1,181,675 |
Cardinal Health Pharmaceutical Dist | $1,151,787 |
Labcorps Of America | $1,099,500 |
Medline Industries | $627,803 |
TMXHealthcare Technologies LLC | $519,527 |
B.E. Smith LLC | $496,051 |
National Grid In Pittsburgh | $465,653 |
TOTAL | $16,826,430 |
Who is representing Heywood in the filing?
Heywood Healthcare is being represented in the case by Attorney John Flick, who also serves as the City Solicitor for Gardner, a position he has held since 2009. Flick is the principal shareholder of the Gardner-based Flick Law Group, which specializes in employment law, corporate and commercial law, and residential and commercial real estate. Flick is serving as co-counsel to the Foley and Lardner law firm, which is representing Heywood in the case.
What are the next steps?
"Now that the cases have been filed, Heywood will start pushing forward with the administration of the cases, reducing expenses, and developing a reorganization plan," Flick explained. "We estimate the process will take between six and nine months."
The healthcare system would continue with its normal day-to-day operations while under Chapter 11 protection, according to officials.
This article originally appeared on Gardner News: Heywood Hospital bankruptcy: Creditors, lawyers, medical group
