Joel R. Glucksman
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201-896-7095 jglucksman@sh-law.comFirm Insights
Bankruptcy Judge Allows HealthBridge to Slash Union Workers' Benefits
Author: Joel R. Glucksman
Date: March 21, 2013
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A federal bankruptcy judge has approved a request by New Jersey-based HealthBridge Management to temporarily reduce the benefits of 600 union workers employed by five Connecticut nursing homes while it undergoes bankruptcy proceedings.
Bankruptcy Judge Donald Steckroth sided with the distressed company after it noted that the full costs of pension and benefits insurance would force the company out of business and jeopardize its ability to continue operations at five nursing homes it owns. During the temporary reduction, pension benefits will be suspended, health insurance premiums will spike, and workers will be paid for 7.5 hour rather than 8-hour shifts. These are the same terms HealthBridge set in July when it unilaterally cut union workers’ benefits, a decision that eventually resulted in a strike.
“There can be no debate but that the interim modifications sought in the Motion are essential to the continuation of the Debtors’ business,” Steckroth wrote in his ruling.
Steckroth also noted that the five nursing homes the company services would experience a joint monthly loss of $800,000 if the reductions were not implemented. The decision will be in effect for six weeks, which the court deemed a sufficient amount of time for the company to line up financing to help it traverse bankruptcy proceedings.
HealthBridge sought bankruptcy law protection under Chapter 11 of the Bankruptcy Code in February, citing high union costs that were threatening its operating budget. The company listed roughly $50 million in liabilities, which also forced five of its union-operated nursing homes into bankruptcy. The nursing homes included in the filing are Long Ridge of Stamford, and the Westport, Newington, West River, and Danbury Health Care Centers. HealthBridge said that its bankruptcy won’t affect patient care or the operation of additional nursing facilities.
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