Former employees could receive their first payouts within a year
When Palm Drive Hospital closed in 2014, more than 240 former employees were terminated with no certainty about when they would see their final paycheck.
During a special meeting on Sept. 10, the Palm Drive Health Care District Board of Directors approved a resolution, detailing a strategy to pay off debts, that will be taken to bankruptcy court.
For the first time, former hospital employees got a glimpse of the district’s payout plan. Sarina Ferguson is a member of the Employee Committee, appointed by the United States Trustee, for the PDHCD bankruptcy.
She regularly attends district board meetings with hopes some news will be available regarding the more than $8,000 still owed to her.
“It’s not just our last month’s pay; it’s also all of our PTO (paid time off),” she said. “And some people had a ton saved up.”
In the final month before Palm Drive Hospital closed, Ferguson said employees were not allowed to take their PTO.
“It went straight into bankruptcy, so we didn’t even have an option,” she said.
If the resolution of debts is approved at bankruptcy court, former employees who are owed more than $10,000 would be paid 60 percent of what they are owed; former employees owed less than $10,000 will receive 40 percent.
“I personally am not okay with 60 percent or the 40 percent if you get the lower amount,” Ferguson said. “I don’t think that’s very fair.”
Former employees attended meetings and asked for dates of resolution, but mostly they have waited in frustration. Ferguson said she got tired of being patient. She decided to start attending meetings, and she said that’s when activity began to happen.
“When I started coming a year and a half ago, that’s when they started the bankruptcy contingency plan, after I complained for three months,” Ferguson said.
“It’s the only thing that’s worked. We’ve tried to be quiet for three years, and it didn’t work.”
The district was ordered to appear in bankruptcy court on Sept. 5. Dale Bratton, the district’s bankruptcy legal counsel, spoke at the PDHCD meeting about the court appearance. He said the bankruptcy judge set a Nov. 19 deadline to file a plan of disclosure statement with the court.
The disclosure statement describes the plan and determines what creditors and claims will be paid and when. If the court approves the disclosure statement, then the creditors can vote on it.
Bratton said it takes a vote of approval from at least one group of creditors, in addition to approval from the judge, to officially accept the plan and move forward.
During the meeting, Gia Smith, Chief Executive Officer of American Advanced Management Group, said a license has been approved by the state for AAMG to manage the hospital. The PDHCD board unanimously approved the termination of their management agreement with Sonoma West Medical Center, Inc.
Smith said they have allowed all SWMC employees the right to apply for positions with the new facility.
“We’ve had a great turn around of people that have reapplied,” Smith said.
“So far every one that has applied, we have taken.”
The next regular PDHCD board meeting is scheduled for Oct. 1.