Palm Drive Hospital announces bankrutpcy exit plan

<p>Palm Drive Hospital in Sebastopol has for the second time in seven months filed court documents that propose to settle $3.6 million in debts and emerge from bankruptcy protection.</p><p>The hospital announced the filing Wednesday. It proposes to pay 75 cents on the dollar tocreditors who are owed less than $10,000. Those creditors owed more than $10,000 would receive 55 cents on the dollar.</p><p>The plan still must be reviewed by the court and approved by a vote of the creditors. But the hospital said in a press release that the plan has the approval of the Creditors’ Committee.</p><p>“This is a pivotal event,” James Russell, Palm Drive’s chief executive officer, said in the press release. “This filing means we will be able to settle with our creditors, exit Chapter 9 and continue to grow the business.”</p><p>Palm Drive filed for bankruptcy in April 2007.</p><p>The hospital plans next to sell $10 million in a type of bonds known as certificates of participation. The resulting funding would be used partly to settle with creditors and to repay a $3 million loan from the County of Sonoma.</p><p>Palm Drive had attempted to exit bankruptcy last fall but pulled back because of what officials then described as uncertainties in the bond market.</p><p>The 37-bed hospital is operating in the black for the first time since it was purchased by the community in 1999, according to the press release.</p><p>Palm Drive reports annual revenue of $25 million. The hospital is supported by a parcel tax on west county properties.</p>