FOUNTAIN SPRINGS - Saint Catherine's Hospital of Pennsylvania LCC, the owner of Saint Catherine Medical Center Fountain Springs, filed for Chapter 11 bankruptcy Monday.
Attorney William G. Schwab, Lehighton, has been appointed by the U.S. Department of Justice, Office of U.S. Trustee, to be the Chapter 11 trustee of the medical center and will soon be taking charge of the hospital's facilities. A Chapter 11 trustee is an independent person appointed by the government to run and reorganize failing businesses in an effort to rehabilitate them for the benefit of their creditors.
According to the U.S. Courts website at www.uscourts.gov, Chapter 11 of the bankruptcy code generally provides for reorganization, usually involving a corporation or partnership. A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in Chapter 11.
Schwab has 35 years experience as a bankruptcy attorney in Schuylkill, Carbon and Luzerne counties and has served for more than 10 years as a Chapter 7 Panel Trustee in Bankruptcy in the U.S. Middle District of Pennsylvania.
In the announcement about the bankruptcy filing, Schwab said he is aware of the hospital's "rich history," noting that the first patient was admitted in 1883. In the press release, Schwab stated, "when all is said and done that 2012 will not be the date of the last admission," adding that he would like to "do what is right" for the employees, community, patients, physicians and shareholders.
"Chapter 11 is a situation where you attempt to reorganize the corporate facilities so that the corporation continues on, be it as a hospital or something similar," said Schwab in a phone interview.
The next step is for Schwab to visit the hospital to investigate the situation.
"The next thing that will happen is I have to go out and do a site inspection," he said. "I have to do certain due diligence that's required by the Justice Department, Office of U.S. Trustee."
Schwab said the federal court in Wilkes-Barre is expected to appoint a health care ombudsman today. He explained the ombudsman is appointed to protect patient rights and records.
Schwab said future steps will be determined after he investigates what can be done at the medical center.
"I'm hoping to turn it around," Schwab said.
Schwab said that, as part of his appointment, he would also handle inquiries if an outside party would show interest in buying the facility.
Jennifer M. Pisarchick, administrative director of Strategic Planning and Marketing at Saint Catherine, said all inquiries into the bankruptcy filing should be directed to Schwab.
The hospital was opened in 1883 as the State Hospital for Injured Persons of the Anthracite Coal Region, though was usually referred to as the "Miners' Hospital," since it only took in injured miners, railroad workers and textile workers after its creation. Eventually, it opened to everyone. When Ashland State General Hospital was divested by the commonwealth in the early 1990s, it was renamed Ashland Regional Medical Center. In 2006, it became Saint Catherine.
