Interfaith Medical Center was cleared from bankruptcy Tuesday morning, confirmed a spokeswoman at the hospital.
The hospital, which serves a large low-income population, went into bankruptcy in December 2012 after years of financial trouble stemming in part from a 2010 reduction in Medicaid reimbursements.
A judge on Monday approved the hospital’s restructuring plan to replace senior management with a new state-mandated management team in exchange for state funding.
“Make no bones about it, this is a community victory,” said City Councilmember Robert Cornegy, who has been at the forefront of the battle to save the financially troubled hospital.
“Im very pleased with the way the community went into action around [saving] the hospital. Bed-Stuy and Crown Heights should be proud of what they did, because not every hospital in this situation has had the same fate.”
The settlement included an agreement by the foundation to contribute at least $750,000 for malpractice claims and turn over two hospital parking lots in exchange for property at 515 Herkimer St., 276 Nostrand Avenue and 278 Nostrand Avenue.
Cornegy said the removal of the bankruptcy should begin the process of examining the system of service delivery, which in the past had yielded inadequate.
“So while were celebrating this monumental victory, its only the beginning,” said Cornegy. “People did not participate in the saving of the hospital to save it like it was. We’ve only made good on one-quarter of what we promised; the other three-quarters is delivering stellar service.”
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