Downey Regional Medical Center on Wednesday said that it has emerged from Chapter 11 reorganization and received $52 million in debt financing.
The community hospital filed a voluntary petition for reorganization in September, 2009, citing financial system breakdowns under previous management and poor reimbursement contracts with insurers. Finances at the South Los Angeles County facility also had been hurt by high numbers of uninsured and underinsured patients being treated at its emergency room.
In its exit financing, Downey Regional issued $32 million in new taxable bonds through the Independent Cities Finance Authority, a joint powers authority based in Palmdale, and entered into a $20 million credit facility with Midcap Financial LLC, a private health care financing firm with offices in Los Angeles.
“Downey Regional Medical Center’s recovery is a success story almost without parallel,” said hospital Chief Executive Kenneth Strople in a statement. “Hospitals don’t usually survive bankruptcy intact, let alone unaffiliated, let alone during a severe national recession and an economy that did not support viable capital markets.”