Mendocino Coast hospital files for bankruptcy

FORT BRAGG -- Mendocino Coast District Hospital, a 25-bed nonprofit facility, is seeking bankruptcy court protection from creditors as it seeks to reorganize its debts while keeping the doors open.

The hospital district that oversees the rural hospital voted yesterday to enter into Chapter 9 bankruptcy on the hopes of restructuring its debt and saving the hospital, according to court documents. In its court petition Wednesday for bankruptcy court protection, the district listed debts of between $10 million and $50 million and assets in the same range.

"The forgoing circumstances present an immediate financial crisis that leaves the district with no viable option other than to commence a case under Chapter 9 of the Bankruptcy Code in order to permit the district to fulfill its obligations to the community it serves, to continue the operation of its hospital and to propose a plan for the adjustment of its debts," the district board wrote in an April resolution that initiated the bankruptcy proceedings.

The hospital has been operating at a $429,000 deficit since the start of this fiscal year, according to the filing.

The estimated number of creditors in the petition is between 200 and 999. The hospital's annual budget is $45 million and it employs more than 300 people, according to the petition.

The district also opted not to renew the contract of Chief Executive Officer Ray Hino, who was brought on in 2006 to help the district with its struggling finances, according to the Santa Rosa Press Democrat.

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