When its private-equity owners placed Hahnemann University Hospital into bankruptcy protection in July, they left the valuable chunk of Center City Philadelphia real estate on which the hospital sits outside the proceedings. This week, Hahnemann’s sprawl of buildings and land in the heart of Philadelphia, a hot spot of protests over the loss of medical care for the poor, came into focus as a major target of the failed hospitals’ creditors, WSJ Pro Bankruptcy reported. Due to its location in a boom area of Philadelphia’s government, business and historic center, Hahnemann’s real estate has sparked interest among developers. Creditors are keeping one eye on the real estate, and another on money moving in and out of the bankruptcy case, trying to gauge the chances they will be paid. Hahnemann as an operating hospital is all but gone, with no patients and firm plans to shut the facility down, despite demands that it be saved, Mark Minuti, lawyer for Hahnemann, said at a hearing on Monday in the U.S. Bankruptcy Court in Wilmington, Del. Other assets are being sold, such as a program that had hundreds of residents, which brought a $55 million bid at auction. However, the real estate that is under the control of Hahnemann’s private-equity owners, led by Joel Freedman, remains beyond the reach of most creditors. One exception is MidCap Financial Trust, which offered bankruptcy financing that Hahnemann said averted an emergency shutdown. Creditors said the chapter 11 loan offers too much to the lender and does too little to cushion the blow of Hahnemann’s financial collapse.
