Southern Regional Health System, Inc. (Southern Regional), a nonprofit organization which owns Southern Regional Medical Center (the Hospital), announced today it has filed a voluntary petition for relief under the provisions of Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Georgia.

Southern Regional officials emphasized that filing for reorganization will allow the Hospital to remain open and operating while it evaluates a proposed sale of the Hospital.  During the Chapter 11 process, the Hospital will continue to provide high-quality care to its patients and meet its current financial obligations to its employees and vendors.  To ensure it will be able to meet its financial obligations, Southern Regional has obtained a commitment for post-bankruptcy financing (known as “Debtor in Possession Financing”).

Prime Healthcare Foundation, an award-winning non-profit hospital system, operating 7 hospitals in two states, has submitted a Letter of Intent to purchase most of Southern Regional's assets, and would operate the Hospital after the proposed sale.  The terms of the proposed sale also require Prime to make substantial capital improvements to the Hospital, and to continue the Hospital’s commitment to indigent care. Under the bankruptcy sale process, the proposed transaction is subject to the execution of a definitive asset purchase agreement, court approval and other customary conditions.  Interested parties will have an opportunity to submit higher or better offers for Southern Regional's assets.

"We are grateful for the support Prime Healthcare Foundation has provided in connection with its Letter of Intent (LOI) and the proposed sale,” said Jim Adams, Southern Regional’s Board Chairman.  “The purchase of Southern Regional will preserve jobs, access to healthcare in Clayton County, and allow us to emerge from bankruptcy in a relatively short time frame.”

“Both during the bankruptcy case, and after any sale, Southern Regional Medical Center will continue to provide the citizens of Clayton County with a wide array of high-quality medical services,” Adams said.  “We believe Southern Regional Medical Center is essential to the health of Clayton County citizens, the community’s economic future, and the availability of healthcare in the Southern Crescent.”

In recent years many organizations, such as GM and Chrysler and Georgia-based companies including Delta, have been able to use the Chapter 11 reorganization process successfully as a vehicle to restructure their financial obligations while preserving jobs and continuing to serve the public.   “We fully expect Southern Regional to join that list of companies who have emerged from Chapter 11 reorganization even stronger than before,” said Adams.