Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
HealthBridge Seeks Chapter 11 Bankruptcy Protection
Author: Joel R. Glucksman
Date: March 15, 2013
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Five Connecticut nursing homes operated and managed by HealthBridge Management were recently forced to seek Chapter 11 Bankruptcy Protection.
The filing resulted after HealthBridge was denied a request to delay a court order forcing it to reinstate 600 union workers that went on strike after the company unilaterally changed their labor contracts, according to The Associated Press. As a result, the company was forced to file for protection in a U.S. Bankruptcy Court in Newark, New Jersey.
HealthBridge officials said union pensions and health benefit costs for workers with District 1199 of the New England Health Care Employees Union were “unsustainable,” the AP reports. The five nursing homes affected by the bankruptcy – Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center in Milford, and Danbury Health Care Center – employed the majority of workers represented by the union.
However, the company’s homes that are considered non-union are not part of the bankruptcy proceedings.
Although HealthBridge noted that the bankruptcy will not impact patient care and that it has enough money to continue operations, many union members have spoken out against the company’s decision to seek protection. David Pickus, president of SEIU District 1199, said the company is using bankruptcy to avoid its financial obligations to its employees, according to the Hartford Courant.
However, HealthBridge contends that the costs for maintaining existing labor contracts could result in the closure of several nursing homes, the transfer of patients to other facilities, and the termination of more than 1,100 employees.
“The centers have a bright future if they can operate under labor agreements that reflect today’s financial realities, but the fact is the centers will not survive unless we have relief from the crushing burden of unsustainable labor costs, especially the spiraling costs of pension and healthcare obligations,” spokeswoman Lisa Crutchfield said, according to the Courant.
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