Economic times in New York have created a difficult environment for many businesses. Despite the hardship, many businesses have been making improvements to help remain competitive in this economy. However, sometimes a business can do everything right and still they are unable to remain viable.
One New York hospital tried to remain competitive in the changing world of healthcare by hiring the best doctors and upgrading technology. Yet, after Hurricane Sandy the hospital has been forced to file for Chapter 11 bankruptcy.
According to reports, the hospital was severely damaged by the super storm in the fall of 2012. Following the storm, the hospital had no food services, fire alarms, electric system or boilers. Communications within the hospital were also destroyed. More than a year later, these problems are still not fixed and the doors to the facility have remained closed.
As part of the bankruptcy, another hospital system has offered to purchase the remaining assets of the hospital for $21 million. This hospital is getting funds from a grant from the state of New York. The grant was contingent upon the hospital building an urgent care facility in place of the disabled hospital facility. The potential buyer hopes to receive additional funds for repairs to the original facility from the Federal Emergency Management Agency. If all goes as planned, the deal will close by the end of May.
Businesses all over New York may be in a similar predicament. An unforeseen event may have made a business unprofitable or caused its destruction. In these cases, businesses often do not have the revenue streams they once had, yet are saddled with large amounts of debt. In these cases, business bankruptcy can be a good way for business to try to reorganize.
Source: The Wall Street Journal, "Long Island, N.Y., Hospital Files for Bankruptcy," Stephanie Gleason, Feb. 20, 2014