Penobscot Valley Hospital in Lincoln, Maine, will exit chapter 11 protection in the next couple weeks after a federal bankruptcy judge approved a proposal to reduce its long-term debt, the hospital said Friday, the Bangor Daily News report. In a written statement, the hospital said that the proposal would allow it to “preserve” its business operations and jobs. CEO Crystal Landry has previously said the hospital does not plan to reduce services as part of its restructuring. In court filings, Landry said that the hospital would retain all of its assets as it restructured its debts and that it is “stronger, more prepared, and on a better financial footing than the day it filed its bankruptcy petition.” Penobscot Valley Hospital first sought bankruptcy protection two years ago, after accruing up to $10 million in debts to various creditors including the U.S. Department of Agriculture, the Maine Department of Health and Human Services, Machias Savings Bank and the federal Centers for Medicare and Medicaid Services. Under the hospital’s restructuring plan, Maine DHHS and the Maine Revenue Service agreed to “significantly reduce” the $2.9 million Penobscot Valley Hospital owed to the state at the time it filed for bankruptcy, Landry wrote in a court filing.
