Sources: Hoboken to withdraw request to sell hospital after bankruptcy negotiations collapse
Published September 23, 2011
Hoboken University Medical Center is shown in this file photo. The hospital’s future is in doubt after the city plans to withdraw its request to sell the facility after negotiations to settle a pending bankruptcy collapsed today, sources told The Star-Ledger.
HOBOKEN — The city of Hoboken is planning to withdraw its request to sell its beleaguered hospital after negotiations to settle a pending bankruptcy collapsed today, according to sources familiar with the negotiations.
The move puts the future of Hoboken University Medical Center — the oldest hospital in the state, with 1,300 employees — in serious jeopardy. A bankruptcy settlement was considered pivotal to the sale of the hospital to the ownership group of Bayonne Hospital.
The sources requested anonymity because they are not authorized to speak publicly.
By withdrawing the motion to sell the Hoboken hospital, the city and its hospital authority will prevent formal objections to the sale by creditors. Those objections were likely to include information from depositions and emails.
The withdrawal would also make moot a Hoboken ordinance scheduled for a vote tonight that would provide $5 million for the creditors.
The creditors are owed $34 million from the hospital, and the city-backed hospital authority had asked a bankruptcy judge to give them $5 million from the proceeds of the $65 million sale. The bulk of the proceeds was going to pay off $52 million worth of city-guaranteed bonds that would be retired as part of the sale.
The creditors sought up to $12 million from the hospital as part of the settlement, according to the sources. Creditors failed to strike a deal with the ownership group during six hours of negotiations today, they said.
Donna Leusner, spokeswoman for the Department of Health and Senior Services, declined to comment.
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