By Misty Poe
Times West Virginian
The Fairmont General Hospital board of directors decided Friday morning to file for Chapter 11 bankruptcy protection, a decision the CEO said was not taken lightly but is necessary to move forward in search of a strategic partner.
On Tuesday, the board will file for bankruptcy protection in the United States Bankruptcy Court for the Northern District of West Virginia, said Robert C. Marquardt, FGH president and chief executive officer. Under Chapter 11 bankruptcy protection, a business can restructure and reorganize its debts while it continues to operate.
Marquardt admitted that there was some hesitancy for the board before the decision was made.
"It's certainly not the preferred way to go. It's kind of a painful action. And I think there is always an initial sense that reorganization has a negative connotation. But I think that when you look at it from our perspective that the day after we file, all of our employees will have jobs, they will all have salaries, we don't plan any layoffs. It should be very transparent to virtually everyone associated with the hospital, whether they are patient, staff or physicians that nothing has changed.
"It's obviously a step we would have preferred not to have to take, but I think it is very clear that if we are going to go forward, we have to take this step."
Fairmont General officials announced at the end of 2011 that they would seek a strategic partner to take over the facility, especially in light of the health care changes that will be coming next year with the implementation of the Patient Protection and Affordable Care Act passed by Congress in March 2010 and signed by President Barack Obama. The hospital hired New York-based Cain Bros., an investment banking firm that specializes in hospital mergers and acquisitions, and in May 2012 entered into a 60-day exclusive negotiation period with West Virginia United Health System, which owns WVU Hospitals in Morgantown and United Hospital Center in Bridgeport. The time lapsed for action on that agreement and FGH moved forward with considering other options and opportunities.
"In our search for a strategic partner, virtually all of the partners that expressed interest in us told us that they would not go forward without us filing for bankruptcy for reorganization," Marquardt said. "It became very apparent to us that in order for us to go forward and position the hospital for the future, this is something that we had to do."