Outlines of the Madera Community Hospital sign being covered by a tarp at the Emergency Room entrance of the hospital on Jan. 2, 2023. Photo by Larry Valenzuela, CalMatters/CatchLight Local

An anticipated Chapter 11 petition for Madera Community Hospital was filed in federal bankruptcy court Friday.

Saint Agnes Medical Center is the largest secured creditor, owed $15.4 million. New England Sheet Metal and one of its subcontractors together hold mechanic’s liens of about $1.1 million.

About $2 million is owed in unpaid, accumulated time off for employees.

All unsecured creditors are owed a total of about $9.1 million.

Madera Community Hospital also filed a list of its 20 largest, unsecured creditors.

The largest unsecured creditor is Citizens Business Bank, owed $1.1 million, followed by the State of California Emergency Medical Services Authority owed $776,412 and Arya Medical Group in Fresno owed $300,723.

Assets include $5 million in cash, the hospital campus with an estimated value of $16 million to $60 million and incoming provider fees of $24 million.

Along with the bankruptcy petition, Madera Community Bank also filed emergency motions to pay certain pre-petition wages, salaries, benefits and other compensation.

According to the filing, the hospital has laid off more than 700 employees since Dec. 26, and currently has 31 full-time employees and four per diem employees managing the shuttered facility in administration and maintenance positions.

“Although MCH is not currently treating patients, it has extensive ongoing operations relating to preserving its assets, seeking “suitors” and exploring resumption of operating its clinics,” according to a filed statement from Madera Community Hospital CEO Karen Paolinelli.

Paolinelli outlines several financial hurdles for the hospital, focusing on the time period from 2019 and 2021:

— Average drug expenses in 2021 were 37% higher

— Medical supply expenses were up 21%

— Labor expenses (more than half of total expenses) increased 19% per patient

She made a point to state all of those line items were even more costly in 2022. These combined with paltry Medi-Care and Medi-Cal reimbursements created an untenable operating situation.

A possible affiliation agreement with the parent organization of Saint Agnes  was scuttled after Attorney General Rob Bonta placed conditions on the deal.

“The bottom line is that MCH has done everything it can to increase its revenues, but the increasing expenses caused MCH to sustain a loss of $2.0 – $2.5 million per month during 2022. This plus the failure of the affiliation led to the closure,” Paolinelli wrote.

“MCH is a very sick hospital.”