Quorum Health is filing for bankruptcy protection amid the COVID-19 pandemic. The Brentwood-based hospital operator announced Thursday that it had filed under Chapter 11 and would continue operating its 23 hospitals, which are spread across 13 states (though not Tennessee).
Quorum is a recent spinoff from Community Health Systems. Like its former parent company, Quorum struggled with an outsized debt load long before COVID-19 forced the cancellation of elective procedures and disrupted its revenue stream.
“This relief, quite honestly the best way I know to describe, is a blessing,” COO Marty Smith said in a web video to employees and vendors, assuring both that they will continue to be paid.
The restructuring should allow the company to cut its debt by $500 million. It’s also receiving a $100 million investment from existing debt holders.
Shareholders will be completely wiped out. In recent months, private equity firm KKR had made a buyout offer of just $1 per share.
More: Read an FAQ from Quorum on the bankruptcy here
Brentwood-based Community Health Systems has also signaled trouble on the horizon. The much-larger firm, which employs roughly 4,000 people at its corporate offices in Antioch and Cool Springs, warned investors yesterday that the cancellation of elective procedures would “adversely affect” the company’s earnings and potentially prevent the repayment of billions of dollars in debt coming due in the next few years.
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