Update: NARH parent company files for Chapter 7 bankruptcy protection
PITTSFIELD - Northern Berkshire Healthcare Inc., the parent company of North Adams Regional Hospital, has filed for Chapter 7 bankruptcy protection in federal court in Springfield.
But an emergency order has been extended until Tuesday allowing officials to re-establish emergency services at NARH under the direction of Berkshire Medical Center. The hospital closed abruptly on Friday.
During a hearing in Berkshire Superior Court on Thursday, attorney John F. Rogers, who represents Berkshire Health Systems, the parent company of BMC, said it was important for the order to remain in place so the 110 BMC employees "diligently" working at NARH to restore emergency services could continue to do so.
"We don't want to impede the progress made so far," he said. "It would be helpful if the [temporary order] was extended." Rogers said if the order were to expire there was a question about whether the employees could be considered as trespassing on hospital property.
He was one of 10 lawyers representing a multitude of interested parties in court to try and hash out what the bankruptcy means in the face of an already complicated situation that the state Attorney General's Office has termed a "public health crisis."
The state last week successfully petitioned the court for an order to keep the emergency room open until it could be transitioned to a satellite BMC emergency care center. But the ER ultimately had to shut down when it became clear NBH could not afford to comply with the ruling.
Among the parties at Thursday's hearing were the AG's Office, a lawyer representing the Massachusetts Nurses Association and several lawyers for Wells Fargo Bank, a principal creditor of the hospital.
What was originally scheduled to be a hearing on whether the hospital's closure was lawful, quickly changed tenor when it was determined NBH had filed bankruptcy. The proceedings became, in part, a discussion on whether the Superior Court now had jurisdiction in the case.
Attorney Daniel Cohn, representing NBH, argued that the Superior Court no longer had jurisdiction in the case because of the bankruptcy filing, which in most cases supercedes other court's actions.
Assistant Attorney General Mary Beckman countered that there were certain exceptions that allowed the Superior Court to maintain control of a case. Because the hospital failed to give 90 days notice before closing, in violation of state law, the Superior Court could maintain control in this case, she said.
Judge John A. Agostini extended the emergency order until Tuesday, when the parties will meet in Hampshire Superior Court in Northampton. The judge said he needed time to research whether the court had jurisdiction and to give the parties more time to try to work out a solution outside of court.
There was some progress made regarding the hospital's situation, according to the AG's Office.
Beckman said one of the electronic medical file systems had been "migrated" over to BMC, but several others still need to be moved, which could take up to 10 days.
Bart Hollander, the chief of the AG's Western Massachusetts Regional Office in Springfield, said the parties met before the hearing and although some progress was made it "didn't bear fruit."
He said they are continuing to discuss options in order to move toward a resolution of the situation. Lawyers for Wells Fargo Bank said they didn't want to stand in the way of restoring emergency services and hoped to "work with the involved parties."
Meanwhile, a petition filed Thursday calls for the liquidation and sale of the hospital's assets, and the dissolution of Northern Berkshire Healthcare under the authority of a court-appointed trustee.
Boston attorney Harold B. Murphy has been appointed trustee to oversee and administer the case, according to Boston Business Journal. Having only been appointed that morning, Murphy wasn't at the hearing.
A call to Murphy seeking comment wasn't immediately returned.
According to Cohn, there was a "skeleton crew" at the hospital, including the necessary employees dealing with medical records, who have been paid "through the end of the week." After that time it would be up to the trustee to let them know what to do.
The hospital closed Friday with a few days notice, leaving North County with no nearby emergency room service. "Our hope is that a strong provider goes in there," Cohn said after the hearing.
Attorney General Martha Coakley said in a statement that the surprise bankruptcy filing by Northern Berkshire Healthcare and the North Adams Regional Hospital Board "does not change our goal of ensuring access to safe emergency services for area residents.
We are disappointed the board does not appear to share this same goal. We are pleased that the court extended its order through Tuesday and we will continue to work with all stakeholders with the purpose of reopening an emergency room in North Adams as soon as possible," she said.