On May 27, 2020, the United States Bankruptcy Court in Fresno approved the Coalinga Regional Medical Center’s Chapter 9 Plan. This brings the complicated, bankruptcy filing to legal resolution. The District remains intact and able to provide healthcare services to the people of the District through its lease arrangement with Coalinga Medical Center. 

William Lewis, President of the Board of Directors, said that the board is very pleased with this accomplishment. “We very much appreciate the support we have received from the community. This has been a long and difficult road for us. But with this court approval, we are optimistic that the District will now be able to resume healthcare services to our community. We couldn’t have done this without the coordinated efforts and commitment of the board and management, especially Wayne Allen, Strategy Advisor and Sandra Earls, CFO.” 

Sandra Earls, long time CFO and Coalinga resident, added that approval of the plan reflects the culmination of months of negotiations, led by bankruptcy counsel Riley Walter and district counsel, Peter Zeitler, with bond holders, unsecured creditors and other stakeholders to address the serious financial challenges the District faced on September 7, 2018 when the bankruptcy proceeding was filed; “This plan provides the blueprint for us to meet our financial obligations including payment of bond holders and unsecured creditors. The overwhelming support from our creditors was incredible.” 

The plan calls for the District to lease its healthcare facilities to Coalinga Medical Center with an option to purchase. Property tax revenues will be used to service bonded indebtedness. 

The budgets call for the District to be able to provide some healthcare services in the future such as diabetes education, healthy living and hypertension prevention. Coalinga Medical Center is supposed to reopen the hospital facility by September 2020. 

Riley C. Walter, bankruptcy counsel for the district commented on the complicated Chapter 9 filing and the Plan of Adjustment that was approved. 

Walter stated “Reorganization cases are very difficult, especially hospitals. This has been quite a remarkable turnaround. It took incredible support from the community, board, and management to pull this off. The winners are the people of the district.” 

President Lewis agreed. “When the District filed bankruptcy, it was facing extraordinary financial, legal and political challenges. The community was in an uproar. The fact that CRMC has been restructured is no doubt due to the collaboration of all of the stakeholders who were all focused on success.”