Hahnemann bankruptcy proceedings start slowly in Wilmington

In Wilmington Thursday afternoon, U.S. Bankruptcy Judge Kevin Gross was scheduled to hear lawyers representing Hahnemann University Hospital describe arrangements for debtor-in-possession financing — how the hospital would borrow money to pay its bills and operate until it officially shuts down.

But things did not go according to plan. After several delays of the hearing’s start time, Hahnemann legal counsel Mark Minuti explained to the judge that he had received a call from lawyers at the Department of Justice as he walked into the courtroom.

Minuti said the DOJ attorneys were concerned that the language in the request for financing might prevent the federal government from receiving a specific type of Medicaid payments owed it by the hospital. That’s because the financing plan provides that the funding would be held by the lenders, not the hospital. Hahnemann’s attorneys requested some time to figure out the degree to which that concern affected the hospital’s request, and Gross agreed to meet again Friday at 11 a.m.

Minuti also asked Judge Gross to expedite a hearing on whether Hahnemann’s emergency department could shut down completely by the middle of next week.

“Every dollar I spend on the ER at Hahnemann is a dollar I take away from something else,” Minuti explained. “That something else is St. Chris, which I’m trying to sell, which I think is going to maximize value for all the constituents here.”

St. Christopher’s Hospital for Children, like Hahnemann, is owned by Philadelphia Academic Health System. It is a part of the Chapter 11 bankruptcy filing, but will not close.

Minuti assured the judge that his team was meeting with various creditors and constituents — many of whom have objected to the hospital’s closure plan, including the city of Philadelphia and the Pennsylvania Health Department — and would get everyone on board for the emergency room shutdown. He acknowledged that would mean Philadelphia Common Pleas Court Judge Nina Wright Padilla would need to lift her injunction preventing the hospital from closing, and that the state Health Department would have to revoke its cease-and-desist letter.

The judge agreed to hear the request that the ER shut down sometime next week, providing those conversations go well.

Originally, Gross was scheduled to hear the hospital’s closure plan, to which the city, the state Health Department, the union representing Hahnemann’s nurses, and Drexel University all have filed objections.

At that hearing, the judge will determine whether the hospital’s proposed plan is sufficient to allow it to start winding down overall operations. That hearing will also include a decision on Hahnemann’s proposal to transfer all its medical trainee positions — residents and medical fellows — to hospitals run by Tower Health. Hahnemann now serves as the primary teaching hospital for Drexel’s College of Medicine.

When Hahnemann’s closure was announced at the end of June, the more than 550 doctors in training were left in the dark as to how they would proceed. Minuti said he hoped the new proposal, on which Drexel has signed off, would assuage the concerns of at least that party.

For now, the hearing on the overall closure plan is scheduled for next Friday, July 19.