Maine hospital wants to temporarily exit bankruptcy to get PPP loan

Calais (Maine) Regional Hospital is moving to temporarily exit bankruptcy in an effort to qualify for a Paycheck Protection Program loan under the Coronavirus Aid, Relief and Economic Security Act.

Calais Regional applied for at least $1.5 million in PPP funding, but was denied it because of a rule that doesn’t allow bankrupt hospitals to receive the funds, according to the Bangor Daily News. Several rural hospitals, including Calais Regional, filed lawsuits in April against the U.S. for blocking financially troubled companies from accessing the loans, but a bankruptcy judge dismissed their lawsuits. In June, a U.S. appeals court ruled in a different case that bankrupt hospitals aren’t eligible for PPP loans. 

Now, the hospital asked a judge to dismiss its Chapter 11 bankruptcy filing to seek at least $1.8 million in PPP funding, according to the Bangor Daily News. If the hospital can leave bankruptcy, First National Bank has agreed to extend a forgivable PPP loan to the hospital. After securing the loan, the hospital would then re-petition for Chapter 11 bankruptcy, according to court filings cited in the report.

The hospital entered bankruptcy with about $25 million in debt. It has received at least $3.7 million in other federal relief during the pandemic.

Read the full report here.

More articles on healthcare finance:
Georgia hospital to close in October
Financial fallout from COVID-19: 9 latest hospital layoffs and closures
How much federal aid are hospitals in COVID-19 hot spots getting? A state-by-state analysis


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