The bankrupt North Philadelphia Health System plans to hire an investment bank to market its remaining properties, NPHS said in a court filing Tuesday.
“The debtor needs to retain an investment banking firm to provide advice with respect to exploring its strategic options, including, but not limited to, a possible sales process,” said NPHS’s motion asking for permission to hire SSG Advisors LLC of West Conshohocken.
As part of its six-month contract, SSG, which has a long track record of selling distressed businesses, will help develop a list of “suitable, potential buyers” of Girard Medical Center, a 65-bed psychiatric hospital, and the Goldman Clinic, a methadone treatment center, both at 801 W. Girard Ave.
It is likely that the Girard complex is worth more for the real estate than for the businesses, which have operated at a loss for years. In bankruptcy documents, NPHS listed the value of the real estate at the Girard Medical Center complex, including two parking lots, at $29.4 million, about what NPHS owes to unsecured creditors, such as Independence Blue Cross and Peco Energy.
If the property were sold for its real estate, as opposed to a business that provides mental health and drug and alcohol treatment, it is not clear what organization would step in for Girard, which mainly serves low-income Medicaid beneficiaries.
The Pennsylvania Department of Human Services, which runs the state's Medicaid program and last year ended the subsidies to St. Joseph’s Hospital, leading to the facility’s closure in March 2016, said it is monitoring the bankruptcy.
"We continue to work with all parties to ensure a positive and beneficial transition for the North Philadelphia community and the individuals the department serves," a DHS spokeswoman said.
Philadelphia’s Community Behavioral Health, which manages mental health care under Medicaid in the city, did not provide a comment.
The sale of the former St. Joseph’s Hospital at Sixteenth Street and West Girard Avenue, to local developers for $8.1 million is scheduled to close this week.