When businesses in Rockville are forced into bankruptcy, it is rarely due to one single reason. Rather, a unique (and unanticipated) confluence of factors contributes to it experiencing financial struggles. Oftentimes alternative revenue streams may be available to offset major losses, but when a company specializes in a single service, finding other sources of funds can be difficult. Ultimately, bankruptcy might be the only option if a struggling company wants to stay in business.
One might think that if any company would be immune from an economic downturn, it would be a hospital (after all, no matter the state of the economy, people will continue to get sick or injured). Yet a rural community hospital in Maine recently filed for a Chapter 11 bankruptcy, citing both reduced insurance reimbursement and declining patient volumes as the reasons for its struggles. The hospital noticed a significant decrease in patient admission after the local area’s largest employer went out of business. This change happened to coincide with reductions in reimbursement from both Medicare and Medicaid (a trend that healthcare industry experts say is threatening the financial positions of hospitals across the country).
The hospital will continue to remain open during its bankruptcy case and hopes to emerge from it on much stronger financial footing. This is only a possibility due to the unique aspects of a Chapter 11 bankruptcy. This form of bankruptcy allows a company the chance to reorganize its structure while it negotiates with its creditors to settle its liabilities. Ultimately, the same parties may retain ownership, yet in a position that is more favorable to their chances at avoiding debts in the future. Those organizations looking for such assistance may wish to seek out the services of an experienced bankruptcy attorney.
