Tulare Local Health Car District Set to Emerge from Bankruptcy

A Press Release from Wheelhouse Strategies

On August 16th, the Tulare Local Health Care District’s Chapter 9 Plan was approved by the United States Bankruptcy Court in Fresno. This brings the complicated, nearly two-year-old, bankruptcy filing to legal resolution. The District remains intact and able to provide healthcare services to the people of the District through its arrangement with Adventist Health Tulare.

Kevin B. Northcraft, 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 confident that the District will now be able to continue to provide healthcare services to our community. We couldn’t have done this without the coordinated efforts and commitment of the board and management, the Tulare City Council, our legal counsel, financial consultants and our partnership with Adventist Health Tulare. This took more than a ‘village’ to accomplish.”

He finished his comments with the familiar motto: “Keep Tulare Strong!”

Sandra Ormonde, CEO for the District added that approval of the plan reflects the culmination of months of negotiations, led by bankruptcy counsel Riley Walter and District counsel, Todd Wynkoop, with bond holders, unsecured creditors and other stakeholders to address the serious financial challenges the District faced on September 30, 2017 when the bankruptcy proceeding was filed; “This plan provides the blueprint for us to meet our financial obligations including repayment of bond holders and unsecured creditors. The overwhelming support from our creditors was incredible.”

One hundred percent of all trade creditors voted to support this plan with the sole exception of BakerHostetter. BakerHostetter is the district’s former legal counsel who is being sued by the District in the Tulare County Superior Court.

Key to the approval of the plan was the partnership with Adventist Health Tulare and financial support from the City of Tulare. Adventist Health has a strong and positive presence in the Central Valley providing a network of more than 60 healthcare locations in Kings, Fresno, Tulare, Kern and Madera counties. Adventist Health took over management of the 101-bed hospital in October 2018 and became the lessee of the hospital in March 2019.

Since then, Adventist Health Tulare has reopened several lines of service and people no longer have travel outside of the District for healthcare thus alleviating pressures on other nearby hospitals. Randy Dodd, President of Adventist Health Tulare, expressed his satisfaction with the court approval: “This is the resolution we have all been hoping for. The partnership we began with Tulare in 2018 is a perfect fit with Adventist Health’s commitment and service to the Central Valley. We are glad to be able to extend our excellent healthcare system to this under-served
market.”

Dodd added that he was pleased to announce that the newly opened Birth Center which features two labor and delivery rooms, 11 patient rooms and a state-of-the-art infant security system, has already had its first patient. Dodd said “We are pleased to announce that Adventist Health Tulare’s Birth Center welcomed its first arrival, a baby girl, born on August 19th. This is the first baby born in the District since the bankruptcy was filed nearly two years ago.”

Additional healthcare services planned for the near future include a sleep lab and mammography services.

Mike Jamaica, Vice President of the District, also wished to draw attention to the role the City of Tulare played in getting the hospital reopened and in receiving court approval of the Chapter 9 plan. “The City of Tulare really stepped up to keep the District intact and the hospital open. This is a win-win for everyone in Tulare; people will keep their jobs; the local economy will benefit, and the residents will have great access to healthcare.”

Riley C. Walter, bankruptcy counsel for the district, and a reorganization specialist, commented on the complicated Chapter 9 filing and the Plan of Adjustment that was approved. Walter stated: “This may be the first time ever a public hospital filed bankruptcy, surrendered its license, reinstated its license, reopened its doors and confirmed a plan. This has been quite a remarkable turnaround. It took incredible support from the community, board, management, advisors, Adventist Health Tulare and the City of Tulare to pull this off. The winners are the people of the district.”

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

In Depth: Tulare Regional Medical Center

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