Editor’s note: This article was updated to include comments from the California Nurses Association and Hazel Hawkins Memorial Hospital. Lea este articulo en español aquí.
A judge has dismissed San Benito Health Care District’s petition for bankruptcy, stating he found Hazel Hawkins Memorial Hospital ineligible to receive bankruptcy protection.
According to court documents, Judge Stephen L. Johnson concluded that Hazel Hawkins Memorial Hospital, which is governed by San Benito Health Care District, did not prove it was insolvent and unable to pay its debt. He presided over a four-day hearing on the question in December 2023.
The hearing was to determine whether the hospital is eligible for bankruptcy protection after the California Nurses Association and the National Union of Healthcare Workers opposed the filing.
“This is a great day for the people of San Benito County and those who receive care or work at Hazel Hawkins Memorial Hospital,” said registered nurse Diane Beck in a California Nurses Association news release. “We knew from day one that this claim of bankruptcy was bogus and intended to bust the unions and scare the community. We feel vindicated that the court was not persuaded by the false claims and distortions presented by the district during this bankruptcy case.”
Hazel Hawkins Memorial Hospital said in a news release, “The court’s conclusion that the district is not insolvent should be seen as a reflection of the district’s concerted effort to ensure that its hospital can continue to serve the San Benito County community in the future.”
The court’s conclusion that the District is not insolvent should be seen as a reflection of the District’s concerted effort to ensure that its hospital can continue to serve the San Benito County community in the future.
According to the court document, Johnson found the district was in a “dire financial situation” by the end of 2022, but that the health care district’s cash flow had improved since the beginning of 2023—enough to pay its debts.
Johnson also stated he found that a financial forecast by financial advisory service B. Riley, a consultant contracted by the health care district in late 2022, was flawed.
That forecast predicted the district would run out of cash by the end of 2024, but the court found the figures used by the firm were different from those in the district’s monthly financial reports, the court document said.
From December 2022 to April 2023, the court found a difference of $15 million between the B. Riley report and the health care district’s monthly financial reports.
The court also found the district’s Chief Financial Officer Mark Robinson, a witness in the hearing, provided conflicting testimony when he said the district’s financial reports were reliable.
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