Hospital’s Parent Company Seeks to Sell Facilities
With debts amounting in the millions of dollars, and eight companies starting lawsuits against their parent company, Victory Medical Center Landmark, a hospital located in San Antonio, Texas filed for Chapter 11 bankruptcy protection on June 15, 2015.
The hospital’s current plan is to sell their facilities so as to pay back their debts.
Hospital is Part of Large System of Health Care Facilities
The hospital is part of a system of six hospitals under the umbrella company Victory Healthcare. Due to a failing financial situation in the system, Victory Healthcare has been forced to file bankruptcy protection for most of its hospitals and other entities.
Two of the facilities are not included in the bankruptcy filing because they have potential buyers and are not being dealt with through the court process. They are Victory Medical Center Beaumont and Victory Medical Center Houston-East.
All six of the Victory Healthcare’s hospitals are located within the state of Texas, including Plano, Houston and San Antonio. Several of the hospitals offer general services, whereas others are specialized in surgical procedures. Victory Healthcare is estimated to have up to $10 million in assets heading into bankruptcy.
Victory Medical Center Landmark as well as the other hospitals within the Victory Healthcare system are managed by Victory Parent LLC.
Insurance Problems Caused the Bankruptcy
Victory Healthcare has put the primary blame for their filing for bankruptcy protection on insurance companies, and their inability to reimburse the hospitals in their system quickly enough. This has proven to be fatal for the Victory Healthcare system.
“Unfortunately, as out-of-network providers, we came under attack by large insurance carriers,” Robert N. Helms Jr., Victory’s chairman, CEO and manager, said. “Even though we were able to execute in-network agreements with three large insurers, the extreme slowness and lack of payment constrained liquidity significantly.”
Victory Medical Center Landmark is a specialized surgical hospital, and at one point had 230 employees. At the time Victory Healthcare filed for bankruptcy protection, the hospital had cut their staff down to 160 employees.
Creditors Site Insurance Problems as an Excuse
“The issue with the folks at Victory Healthcare is that they’ve taken so long to pay many invoices or flatly refused to do so,” said Elliott Cappuccio the lawyer who represents Alliance Partners LLC, one of the many creditors of Victory Healthcare.
“It suggests that it’s something more than just the insurance carriers failing to make timely payments.”
Sale of Their Facilities is a Must
Victory Healthcare has made it clear that they intend to sell some of their financially struggling hospitals in the next 8 weeks.
“Victory had no other choice than to start selling its facilities,” said Helms.
The sale of their Plano hospital is being offered to Nobliss Health Corporation of Houston, Texas. Nobliss has already purchased another former Houston hospital from Victory Healthcare.
“We have many interested buyers for our different healthcare facilities,” added Helms.
“Creditors of the bankrupt facilities belonging to Victory Healthcare would have the opportunity to object to the terms of any potential sale,” added Cappuccio.