Lessons to Learn from Gilbert Hospital's Case of Filing for Chapter 11 Bankruptcy Reorganization
Gilbert Hospital, one of the most profitable hospitals in the US before, has recently filed Chapter 11 Bankruptcy reorganization.
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Gilbert Hospitalís Bankruptcy Attorney Pernell McGuire revealed that the most critical reason for the filing of the bankruptcy was due to loss of available cash to pay day-to-day operating expenses of the hospital. Stillwater Bank, its lender, was forced to seize around $1.1 million from the hospital which was then led to the loss of cash. Gilber Hospitalís estimated total liabilities range from $1 million to $10 million. Their assets only amount to less than $50,000.
It should be noted as well that in 2013, the investors of Gilbert Hospital resolved a Maricopa County Superior Court lawsuit. In the said lawsuit, Dr. Timothy Johns, founder of Gilbert Hospital was accused of redirecting funds to Florence Hospital (Anthem in Pinal County) and Peoria Regional Medical Center. Dr. Johns is appointed as one of the hospitalís Oversight Committee. In addition to this, there are other two hospitals that were launched by Dr. Johns that had gone through financial difficulties.
It was also last year when Florence Hospital filed Chapter 11 Bankruptcy while Peoria Regional Medical Centerís construction was not completed due to lack of funding.
Dr. Johnsí goal is to have a stand-along hospital emergency room guaranteeing patients would be able to receive medical attention from a doctor within 30 minutes of arrival. There were several doctors who invested $60,000 each and Gilbert Hospital was launched in 2006 with 100 employees. Gaining a hospital-leadership position in Chandler Regional Medical Center in Arizona, Dr. Johns projected that Gilbert Hospital that the hospital would have around 24 patients each day. But eventually, and even during its launch, the real numbers went beyond the projection as there were three times the volume of patients who sought emergency care from the hospital Ė making it one of the most money-making hospitals in the US. In 2011, Gilbert Hospital had a total of $20 million in cash. This was then used by Dr. Johns for founding credit lines for Florence and Peoria hospitals. But it was due to financial mismanagement which led to the draining of funds.
Keith Hendricks, attorney of Dr. Johns stated that alll the diversion of funds from Gilbert Hospital to Florence and Peoria hospitals were all reflected in Gilbert Hospitalís audited financial statements.
About Nielsen Law Group
Planning for oneís future should include planning for the estate and the heirs. Doing so will ensure that the final assets and healthcare wishes are honored, and that loved ones are provided for in oneís absence. Though often overlooked, an individualized estate plan can resolve a number of legal questions that arise whenever anyone falls ill. It will also assist with promoting family harmony and creating a smoother transition of asset distribution.
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Evan A. Nielsen
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