Court Tells Bankrupt Hospital Owner to Rework Loan Terms

Center City Healthcare LLC, the bankrupt owner of two Philadelphia hospitals, faces a tight deadline to negotiate new loan terms after a judge questioned the lender’s benefits.

U.S. Bankruptcy Court Judge Kevin Gross Aug. 20 told the company, a subsidiary of Los Angeles-based Paladin Healthcare, that he would likely reject the debtor-in-possession loan as it’s currently structured. The company said it would try to work out new terms with the lender and come back before the judge at 9 a.m. Aug. 21.

His ruling followed creditors’ complaints that the proposed financing from MidCap Funding IV Trust would allow the lender ...