Five Connecticut health care centers managed by HealthBridge Management announced recently that the U.S. Bankruptcy Court for the District of New Jersey in Newark has agreed to confirm, with limited modifications, the centers’ Chapter 11 Plan of Reorganization.
This is the latest in a series of moves regarding the health care centers and the union representing employees. West River Health Care on Orange Avenue is one of the five health care centers involved.
A union spokesperson representing the health care workers said this latest news doesn’t change anything for the health care employees.
With this latest move, the centers plan to restructure their labor costs and other obligations.
“The plan provides for the combination of concessions and a cash infusion of approximately $67 million from affiliated entities, and was accepted by the overwhelming majority of the centers’ creditors,” said spokesman Ed Remillard.
Remillard said the court overruled the objection of the New England Health Care Employees Union, District 1199 (SEIU, District 1199) and the National Labor Relations Board, and paved the way for the centers to emerge from bankruptcy.
“We are pleased that the court has agreed to confirm our Chapter 11 Plan with limited modifications, clearing the way for us to officially exit bankruptcy,” Remillard said.
Under the plan, the centers’ creditors are entitled to a recovery of up to 75% on their claims and there will be no disruption in operations or services, the company said.
“Throughout this process, we have made the continued high quality care of our residents our top priority, and we are pleased that the Chapter 11 proceedings have had no adverse effect on our patient care, relations with physicians or any other of the centers’ normal operations,” said Remillard. “The financial commitments and undertakings that the centers and their affiliates have made under the plan demonstrate that the continued excellent care and safety of the centers’ residents remains paramount.”
The bankruptcy plan pertains only to the five unionized Connecticut Centers and does not apply to the other health care centers managed by HealthBridge Management, Remillard said. Each of the five centers is a sub-acute and long-term nursing care facility for the elderly in Connecticut. The facilities are: Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center.
Earlier this year, the U.S. Bankruptcy Court for the District of New Jersey granted approval for the five centers to reject the workers’ expired contracts and continue operations under a revised contract, countering a January ruling by a U.S. District Court that found Health Bridge management in civil contempt of court for forcing workers at the health care centers to work under provisions of the revised contract pending bankruptcy proceedings.
The centers and the union have been at odds since 2012, and the battle between the two has included a lockout of employees and a strike.
While the centers aimed to amend contracts and increase employee health care contributions, the union has argued that changes to the workers’ contracts leave them with health care costs they cannot afford.
Deborah Chernoff, communications director for the union, said this latest news doesn’t really change anything.
“The contract changes that the bankruptcy judge permitted were already in place,” Chernoff said. “The question of whether HealthBridge as a company had the right to do this, given their labor law violations and the active injunction still in place against them, remains open. The US District Court Judge, Judge Chatigny, found them in contempt of court for violating that injunction, saying, essentially, that whatever the bankruptcy status of individual facilities like West River might be, HealthBridge the company (and its partner company, Care One) never filed for bankruptcy and therefore is obligated under the injunction to restore the contract cuts and resume bargaining.
“The Labor Board trial focusing on whether the imposition of new working conditions, the lockout and other actions were illegal, is continuing,” Chernoff said. “So the announcement of their emergence from bankruptcy so quickly settles nothing – although it implies from our perspective that their claims of extreme financial hardship were, to say the least, grossly exaggerated.”