SPMH: Employees await pay after bankruptcy court orders $ release

December 31, 2003
Santa Paula News

About 200 Santa Paula Memorial Hospital employees went away empty-handed Friday when their promised pay failed to materialize after a lender refused to transfer funds. As of press time Monday afternoon employees still had not received their paychecks.

By Peggy KellySanta Paula TimesAbout 200 Santa Paula Memorial Hospital employees went away empty-handed Friday when their promised pay failed to materialize after a lender refused to transfer funds. As of press time Monday afternoon employees still had not received their paychecks.At a Dec. 24th hearing in a Woodland Hills U.S. Bankruptcy Court, the judge ordered that the $225,000 payroll be released to hospital employees the day after Christmas.Hospital trustees filed for Chapter 11-bankruptcy protection on Dec. 22nd, just three days after the “Hospital on the Hill” stopped providing all medical services.In the filed court document, SPMH listed assets of $14.5 million – the assessed value of the hospital property as is – and liabilities of $8 million.Paychecks were dependent on a creditor, according to hospital officials.GEHFS Holdings, Inc., a subsidiary of General Electric, had provided a $1 million line of credit to SPMH based on account receivables. The line of credit is now paid down to about $300,000.SPMH officials expected GEHFS to transfer the hospital payroll funds in time for Friday distribution. Employees were to be paid for the two weeks of Dec. 7th to Dec. 21st.
At the bankruptcy court hearing held Dec. 24th, GEHFS attorney Robert Harris objected by telephone to the employee payments, citing concerns that the hospital would not be able to cover its debts.The bankruptcy hearing was conducted by Judge Kathleen Lax in Woodland Hills due to scheduling problems at the Santa Barbara bankruptcy court, where a second hearing is scheduled Jan. 7th.SPMH had expected to retain the employees through mid-January and then keep about 40 employees on indefinitely during the hospital shutdown.A meeting is scheduled Jan. 6th with representatives of Ventura County and SPMH to negotiation a lease agreement with the county health care system. Although negotiations between the county and SPMH had stalled, representatives of Santa Paula and Fillmore acted as mediators to restart talks.Although hospital employees hoped to be paid Monday by press time one staffer said they had not yet received a paycheck.“It’s really depressing,” said the employee, who spoke on the condition of anonymity. “For some reason I wasn’t aware that our pay was dependent on someone that the hospital already owes money to. . .it doesn’t feel real good.”



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