Wall Street Journal - Miracles Do Happen
Jun 6, 2001
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Download Wall Street Journal - Miracles Do Happen - Full Article (24 KB)
Source: Wall Street Journal, 2001-06-06
Thanks to the outstanding management provided by Kurron Shares of America, Inc. (Kurron), a leading health care management and restructuring company, Episcopal Health Services, Inc. (EHS) emerged from Chapter 11 Bankruptcy (Chapter 11) on December 29, 2000, only 13 months after filing. When EHS entered Chapter 11, with $156 million in unsecured debt, it was, according to the New York State Dormitory Authority, the single largest health care bankruptcy in New York State history. Now EHS is generating an operating gain of $3.2 million for the four months post-bankruptcy and is on schedule to repay its creditors in accordance with the Plan of Reorganization. This is truly a miraculous turnaround.
Before Kurron took over, the not-for-profit organization faced a $74 million loss between its two hospital campuses and other ventures. At that point, EHS was on the verge of closing its doors. The communities served by EHS were in danger of losing critical programs and facilities including a 332-bed acute care hospital providing care to a medically under served community with the area’s only dialysis, obstetrical and inpatient psychiatric services.
How did Kurron achieve this miracle?
Kurron began by analyzing EHS’ holdings and implementing an aggressive Plan of Reorganization that resulted in the sale of its Smithtown facilities including a hospital, medical office building, nursing home and a senior housing complex for $94 million. Kurron management worked cooperatively with all of EHS’ stakeholders and increased efficiency while improving the quality of care at the remaining EHS properties. They negotiated with all creditors including the New York State Dormitory Authority, renegotiated collective bargaining agreements and implemented a number of staff reductions in conjunction with productivity improvements. Kurron also worked closely with the physicians, nurses and staff to solidify continued loyalty. In the midst of all of the Chapter 11 reorganization activity, The Joint Commission on Accreditation of Healthcare Organizations awarded EHS’ St John’s Episcopal Hospital, South Shore a full three-year accreditation.
It is a very proud moment for EHS. A special thank you goes out to the patients, employees, the Boards of Managers, neighbors and friends who worked together with Kurron’s management team to save EHS.