Alabama Bill Would Allow Debt Restructuring for Clinic Boards

The Alabama General Assembly cleared a bill Tuesday allowing the state to consent to the restructuring of debt obligations of certain medical clinic boards and giving board members immunity.

The legislation, SB222, comes after one of Alabama’s largest hospitals, Jackson Hospital and Clinic, filed for Chapter 11 bankruptcy in February. The hospital has $60 million in outstanding municipal debt.

The legislation would grant medical clinic boards, which are not permitted to file for bankruptcy, the authority to do so if they lease property to a licensed acute care hospital or health-care provider that has voluntarily filed for Chapter 11 ...