Crittenden Regional Hospital Files Chapter 7 Bankruptcy

Crittenden Regional Hospital Files Chapter 7 Bankruptcy
Crittenden Regional Hospital of West Memphis closed its doors this month, citing financial troubles. The hospital is now at the center of a lawsuit that alleges the misuse of its employees' insurance premiums. (Submitted Photo)

Crittenden Regional Hospital of West Memphis filed for Chapter 7 bankruptcy protection last week, listing estimated debts between $500,000 and $1 million.

The preliminary filing by the Crittenden Hospital Association, which does business as CRH, estimated assets between $500,000 and $1 million.

The 140-bed hospital permanently closed earlier this month citing "the challenges of a struggling economy and continued declines in patient volume and reimbursement."

A more detailed bankruptcy filing is due by Sept. 26.

On Wednesday, Federal Insurance Co. of Warren, New Jersey, filed an interpleader in the bankruptcy case, asking Judge Audrey Evans to determine how to divide the $2.7 million it owes the hospital.

The money is related to a pair of fires that occurred in June and July at CRH. The June fire damaged the main hospital; the July fire ruined the hospital's MRI building, the filing said. So far, Federal Insurance has paid the hospital $8.2 million for the damage to the main hospital and advanced it $40,000 for the MRI claim.

After the hospital said it would close, Federal started receiving bills for work to repair the fire damage.

D&A Enterprises Inc., which does business as Servpro of Fort Collins, Colorado, alleges it has a claim of $2.4 million against the hospital for the clean up and repairs after the fire.

Baldwin & Shell Construction Co. of Little Rock also might have a claim of $442,000 for work it did after the fire, according to Federal's filing. That case is pending.

More On This Story