In Pennsylvania and all other jurisdictions, when a business encounters disruptive disputes with a major creditor, the company may attempt in some circumstances to resolve the issues by filing a Chapter 11 petition. That is the general intent behind a recent Chapter 11 bankruptcy filing by a business entrepreneur and his wife in another state. The bank, Wells Fargo, has obtained an order providing for a receiver to liquidate the companies in which the couple have an ownership interest and to pay the bank with the proceeds.
It is not unheard of in Pennsylvania and elsewhere for hospitals and other medical providers to seek debt relief by filing a bankruptcy petition. There are several circumstances that can converge to make it a smart move for a medical provider or other corporate entity. Seeking bankruptcy protection may be a necessary tactic to restructure debt or obtain a breathing spell to hold off creditors while another financing vehicle is created. In one recent case, a large medical center declared bankruptcy to stop pressure by creditors while it puts together a sale to a private corporation under an existing contract of sale.