St. Mary Appeals Court Order To Keep Hospital Open

Posted: May 11, 1988

Lawyers for the operators of St. Mary Hospital in Fishtown have appealed a bankruptcy court judge's ruling that the hospital must stay open at least two more weeks to allow time for potential buyers to come forward.

Federal Bankruptcy Judge David A. Scholl said in his ruling issued late yesterday that he hoped to see St. Mary and its operator, Franciscan Health System, throw aside the "adversarial atmosphere which has surrounded this matter" and make a good-faith effort for at least 15 days to see it they can save the hospital from closing.

Henry Siedzikowski, an attorney for Franciscan Health System, said the order was appealed with a narrow goal: clarifying whether the judge's order means the hospital must be open to all admissions or whether the hospital may decide on a case-by-case basis.

Siedzikowski said 30 to 40 patients remain hospitalized at St. Mary.

Many members of the staff that once numbered 744 employees - both full- and part-time - already have been laid off. But the judge has ordered the hospital to halt any additional layoffs and stop providing incentives for employees to resign.

The hospital filed for bankruptcy on April 27, citing assets of $15.6 million and liabilities of $13.5 million, according to court documents. However, the hospital is losing $175,000 to $200,000 a week, officials of the Franciscan Health System say.

Since the bankruptcy filing, a coalition of doctors from St. Mary, community groups and city and state officials have been trying to block the planned closing. They contend that hospital management was secretive in its

plans to close and rejected the possibility of selling the hospital.

Officials of Franciscan Health System testified at a bankruptcy court hearing last week that they believed they had little chance of selling the facility because of its heavy financial losses and projected worsening situation. The hospital did contact one investment banking firm and held some discussions about the possibility of selling before deciding to close, testimony shows.

However, James F. O'Connor, an official of another health care company, testified at the hearing that at least two other hospitals might be interested in buying St. Mary. In court documents, he identified one as "a Philadelphia teaching hospital."

He said the interested hospitals have requested confidentiality.

Yesterday, Siedzikowski said there have been expressions of interest from four or five institutions since the announcement that the hospital would close. He said hospital management is seeking more information, in writing,

from each.

St. Mary Hospital serves a neighborhood where about three-fourths of the

families fall below the federal poverty level and a third of the households are on public assistance.

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