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Monsour Medical revisits bankruptcy
Thursday, March 29, 2001 By Pamela Gaynor, Post-Gazette Staff Writer
Citing a cash crunch, long-troubled Monsour Medical Center filed yesterday for federal bankruptcy court protection for the second time but said it would continue normal operations.
The 150-bed hospital in Jeannette has an estimated 300 full-time and part-time employees.
Monsour's bankruptcy petition, filed in U.S. Bankruptcy Court for the Western District of Pennsylvania, did not list total assets or liabilities. But it named the hospital's 20 largest unsecured creditors and estimated their total claims at roughly $3.3 million.
The largest five were Omnicare Pharmacies of Pennsylvania West of Greensburg, for a claim of $752,453; the Pennsylvania Unemployment Compensation Fund, for $571,147; Scanner Corp. of Jeannette, for $339,417; the Service Employees International Union National Pension Fund, for $280,500; and Sodexho Marriott Services of Winsted, Conn., for $22,015.
Monsour's attorney, Robert O. Lampl, said the biggest secured claim was held by Monsour family members who founded the institution in 1952 and bought out the interests of other bondholders about a decade ago.
He valued their combined claim somewhere between $20 million and $25 million.
"There are some other significant [secured] claims, but [the Monsours] clearly have the most at stake financially," Lampl said.
Lampl blamed Monsour's plight on the same private and government payment curbs that have crimped finances for many of the region's hospitals.
"I think they're just a victim of the current health care environment," he said.
In addition, about a year ago, Monsour had to pay back some reimbursements it had received because of overpayments.
"From that point forward, they had a cash shortage," Lampl said. He said the hospital has been expanding its caseload, which also has strained its working capital.
He estimated the institution's annual revenue at $20 million, but could not estimate its losses.
Lampl said the hospital plans to cut expenses and restructure, but didn't rule out the possibility that the board might seek a buyer or merger partner.
The hospital, however, hasn't been robust financially since its first bankruptcy filing some 21 years ago.
It also has been torn by Monsour family feuds over the years. Although it emerged from bankruptcy court protection in 1989, it spent a few years in the early 1990s operating under a court-appointed receiver.
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