Oroville Hospital Bankruptcy Loan Inadequate, Affiliates Say

Oroville Hospital’s proposed $40 million bankruptcy loan fails to account for ongoing lease payments and contractual amounts due to the Northern California health-care provider’s affiliated business partners, the non-bankrupt entities said.

Owners of a skilled nursing facility, three-story medical complex, and other properties that support Oroville Hospital’s operations urged the US Bankruptcy Court for the Eastern District of California to reject the medical provider’s bid to fully tap a Chapter 11 financing package from UMB Bank NA absent “significant amendments” in the loan budget.

As proposed, the budget ignores administrative obligations required under bankruptcy law and jeopardizes the hospital’s ability ...