St. Michael's Hospital Sale In Newark Gets Final Approval

Newark, NJ - The sale of Saint Michael's Medical Center in Newark has cleared its final hurdle.

On Thursday, a state Superior Court judge signed off on the sale of the hospital to Prime Healthcare Services. The deal comes more than three years after Prime Healthcare applied to purchase the financially struggling hospital, and included a detour in U.S. Bankruptcy Court and a second round of bidding that drove up the final sale price to $62 million.

The process was complicated by a report issued last year that recommended Saint Michael’s be closed as an acute care hospital and converted into an ambulatory center.

Faced with uncertainty, the hospital had filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in August of 2015.

• See related article: Newark's St. Michael's Hospital: Bankruptcy Court Approves Sale

According to a previous joint statement, Prime has agreed to keep the hospital open as a full service acute care and outpatient facility providing all of its existing services for a minimum of five years, hire substantially all 1,400 hospital employees, maintain or increase current levels of charity care, and maintain existing health insurance contracts.

In addition, Prime has agreed to invest $50 million to upgrade technology, services and continue to modernize the hospital, the statement read.

• See related article: St. Michael's Medical Center Sale Approved: One Hurdle Left, Newark

“The judge’s order brings closure to a long period of uncertainty,” said David Ricci, president and CEO of Saint Michael’s Medical Center. “I am thankful to all those who stood with us and by us during that period. Now we can look forward to a stable future under the leadership of Prime Healthcare that will allow Saint Michael’s to continue providing high quality health care to the residents of Greater Newark.”

Ricci also thanked a coalition of activists led by a group of local religious leaders that had formed to save the hospital by gathering more than 50,000 signatures urging the Christie administration to approve the sale.

Newark Central Ward Councilwoman Gayle Chaneyfield Jenkins, who led the effort on the City Council to save Saint Michael’s, said the judge’s order was a tremendous victory for Newark and its residents.

“The approval of this sale means 1,400 good jobs in Newark will be saved,” Chaneyfield Jenkins said. “It also means $50 million in private capital will be invested in the Central Ward to modernize the hospital and the city will begin collecting property taxes from Saint Michael’s.”

• See related article: Newark Union Members: Save Saint Michael's Medical Center

Chaneyfield Jenkins said if Saint Michael’s closed, residents of the city would have been left with only one choice in healthcare providers.

“Prime’s purchase of Saint Michael’s ensures residents of the city continue to have healthcare choice,” Chaneyfield Jenkins asserted.

Sign up for Patch NJ email newsletters here.