MADERA, CA (KSEE/KGPE) – The board of the Madera Community Hospital announced that the hospital has filed a Chapter 11 Petition with the United States Bankruptcy Court in Fresno, in a press release sent by a Fresno-based attorney Wagner Jones Helsley PC.

The Chapter 11 proceeding according to Madera Community Hospital was filed on March 10, following the failure of an affiliation agreement between MCH and Trinity Health in December. Chapter 11 is a legal proceeding available to distressed financial entities, that allows for the orderly recognization or liquidation of assets through a legal proceeding presided over by the United States Bankruptcy Court.

In a recent town hall meeting in Madera about the status of the hospital, Madera County Supervisor and Secretary of the MCH Board of Directors Robert Poythress said that the affiliation agreement fell through after California Attorney General unveiled their approval conditions – which Trinity Health turned down. This left the hospital no other option than to shut down, according to Poythress.

According to Riley C. Walter, of Wanger Jones Helsley, a bankruptcy attorney in Fresno representing MCH, this filing will help the hospitals in specific ways.

“By filing Chapter 11, the hospital will receive some breathing room from pending creditor
claims and the board and staff will be able to refocus on finding an alternative suiter or
proceeding with an orderly court-supervised liquidation of its assets,” said Walter.

Karen Paolinelli, CEO of Madera Community Hospital said that they will continue to seek ways to provide healthcare for the people of Madera who need and deserve an acute care facility.

“We have not given up; we will continue our efforts to seek alignment, acquisition, or forge our own path to once again provide services,” said Paolinelli.

At a meeting on the closure of Madera Community Hospital earlier this month, Madera Community Hospital Vice Chair of the Board of Trustees Stell Manfredi detailed the pros and cons of entering into bankruptcy.

Manfredi said bankruptcy would protect their assets – including the equipment, and buildings – and provide an alternative method for a hospital organization to acquire Madera Community Hospital. The problem is that every decision would then need to go through a judge, which was described as being tedious, time-consuming, and expensive.