SEBASTOPOL – Palm Drive Hospital announced today that is has successfully sold off $11 million in bonds, moving the once financially beleaguered hospital out of bankruptcy three years after it sought Chapter 9 protection from creditors.
The bonds will repay a bridge loan to Sonoma County, at approximately $3 million, and $2.2 million will go to bankruptcy creditors. Another $500,000 will repay a loan from the Sonoma Community Foundation
The hospital anticipates that roughly $3 million from the bond sales will be directed toward capital improvements, and any remaining money will go toward legal expenses associated with the bond sales.
“This should give everyone confidence that Palm Drive is making positive progress,” Neil Todhunter, the interim chief executive officer, said. “We can now move forward on solid footing, looking to the future instead of living under the cloud of bankruptcy.”
In 2007, the hospital was hampered with nearly $6 million in operating losses. By the end of the current fiscal year, the hospital expects an operating loss of $514,000, according to Mr. Todhunter.