Creditors' Pressure Sends Winona Into Bankruptcy
Hospital Owes More Than $500K, Utilities Say
POSTED: 10:37 pm EST August 24, 2004
INDIANAPOLIS -- Winona Memorial Hospital said Tuesday it will try to reorganize under Chapter 11 bankruptcy protection after creditors told a court it owes hundreds of thousands of dollars.Three creditors, including local utilities Indianapolis Power and Light and Citizens Gas, filed a petition in an attempt to collect money owed by the hospital.
IPL said Winona owes it nearly $400,000; Citizens Gas said it was owed about $123,000. Because Winona is a hospital, the utilities filed a petition instead of terminating service."Typically, we would have disconnected power to a business well before this," IPL spokeswoman Crystal Livers-Powers said.Winona, located at 3232 N. Meridian St., hasn't paid its electricity bill in full for 15 months, according to IPL."They made arrangements that they didn't honor. They've agreed to payments that they didn't make. This is really just a last resort in terms of resolving this issue," Livers-Powers said.Winona, which physicians bought from Leland Medical Centers Inc. in May, has always intended to fulfill its financial commitments, hospital chairman Dr. Robert E. Mehl said in a press release."Unfortunately, the distressed condition of the hospital when the physicians acquired it, and the inability to obtain adequate financing, has resulted in creditors" filing the petition, Mehl said."We have constructed a reorganization plan that will allow us to continue operations and maintain control over our hospital, and ask for court-ordered relief from our creditors," Mehl said.Mehl said the filing for Chapter 11 protection, which is expected to be done in the next 20 days, will not affect patient care.
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