Grupo HIMA seeks mediation for urgent financing to stave off shutdown

HIMA San Pablo Hospital in Caguas. Grupo HIMA owes about $11 million in property taxes to the Municipal Revenue Collections Center, among other debts.

By The Star Staff

Bankrupt Grupo HIMA has filed an urgent motion seeking mediation before Aug. 30 with the opponents of its petition to obtain debtor-in-possession (DIP) financing, arguing the high risk of a shutdown and the loss of 3,500 jobs.

In the motion filed late Sunday, Grupo HIMA, which filed for bankruptcy earlier this month because of over $400 million in debt, is seeking interim financing to meet payroll and keep the hospital operating. However, the Municipal Revenue Collections Center (CRIM by its Spanish acronym), the U.S. Trustee and the Fiscal Agency and Financial Advisory Authority (AAFAF by its Spanish initials) have raised objections because of the impact they say such financing would have on their claims.

Grupo HIMA obtained court approval to sell its Fajardo facility and is already seeking buyers for the rest of its assets, but it wants to avoid closing facilities.

“This acute liquidity crisis will shortly result in the loss of 3,500 jobs (including medical doctors and other health personnel), 1,200 hospital beds and essential healthcare services, in addition to the loss of value. All of this could be avoided if DIP Financing is made available to the Debtors,” Grupo HIMA said in a statement. “The Debtors are at imminent risk. While they have made great efforts to be able to pay the insurance premiums for malpractice and personal liability insurance policies, among others, due by August 29, 2023, other expenses for professionals, utilities, future payroll, and operations require additional capital to keep the hospitals operating.”

Grupo HIMA said it cannot continue to operate based on cash collateral and collections alone and urged the court to compel CRIM, AAFAF and the U.S. Trustee to engage in court-supervised mediation.

Grupo HIMA owes about $11 million in property taxes to the CRIM. While hospitals are generally exempt from property taxes, Grupo HIMA has lost the exemption because it owes commonwealth taxes. CRIM is concerned that the DIP lender can hold a senior lien over all real estate and could prime CRIM’s lien.

The hospital group also owes about $70 million in unpaid taxes and withholdings.

The U.S. Trustee presented objections because the DIP financing motion, it said, looks more like a final disposition motion and it is concerned about the impact to the estate.