Fairmont General says it will file for bankruptcy
MORGANTOWN, W.Va. -- Fairmont General Hospital announced Friday it will file for Chapter 11 bankruptcy protection next week in an attempt to restructure labor contracts and long-term debts, a move that a spokeswoman says was demanded by both of its potential strategic partners.
The hospital has looking for a partner since December 2011, but spokeswoman Katelyn Mock said it has not yet settled on one. However, she said, "each potential partner had identified that this is necessary."
Restructuring would let Fairmont General prepare for merger negotiations "from a position of strength," she said.
The hospital would not immediately release information about its debts and assets, but those figures will be outlined in the filing, expected Tuesday in federal bankruptcy court.
In a press release, President and Chief Executive Officer Robert Marquardt said bankruptcy "is necessary to make us financially and operationally stronger and to pave a smoother transition when we do find the right partner."
The hospital was founded in 1939, and employs about 700 physicians, nurses and other personnel.
More than 300 are represented by Service Employees International Union District 1199. Executive Vice President Kathy McCormick said the union is committed to working with management to preserve quality care and services but urged management to discuss the challenges with the rank-and-file.
"Not all of the answers or the best ideas come from the boardroom," McCormick said. "If hospital executives are as committed to the future of Fairmont General Hospital as the employees are, they should listen to what workers have to say as well."
Other workers are represented by SEIU Local 550, but Mock couldn't immediately say how many are covered under that contract.
Health benefits and pensions are among the company's key concerns, Mock said, and negotiations with the two unions will begin Sept. 10. Fairmont General must change benefits to be competitive with other area hospitals, including West Virginia University and Mon General, she said.
"We will not negotiate anything that's unfair," Mock said. "... We're looking forward to friendly negotiations."
Fairmont General says many independent hospitals are forging alliances, and at least 45 have been publicly announced so far this year.
"We are taking our future into our own hands and ensuring the future of our hospital," Marquardt said. "We are fortunate to be able to make the partnership decision from a position of greater strength than even a year ago."
Acute-care discharges at the 207-bed hospital are up nearly 12 percent over this time last year, he said, and net patient revenue is up $5 million over last year.
Fairmont General said patients and vendors will see no change during the reorganization, which is expected to take about 12 months."This decision to file for bankruptcy was not reached overnight," said board Chairman J. Michael Martin, "and the process won't be completed overnight, either."