Over 300 jobs to go at Mount Carmel Hospital

//Over 300 jobs to go at Mount Carmel Hospital

Over 300 jobs to go at Mount Carmel Hospital

Friday 24 January 2014 13.36

An orderly wind down of the hospital is planned An orderly wind down of the hospital is planned

More than 300 staff at Mount Carmel Hospital in Dublin will lose their jobs after the directors of the hospital applied to the High Court for the appointment of a liquidator.

The court has appointed Declan Taite and Anne O’Dwyer of RSM Farrell Grant Sparks as Joint Provisional Liquidators.

Mr Justice Paul Gilligan heard that Mount Carmel Medical (South Dublin Ltd), which owns the hospital, is insolvent and unable to pay its debts.

A statement from the liquidators said they “have taken court mandated responsibility for the operation of the hospital and will plan and manage an orderly full wind down”.

The statement added that: “All current patients in the hospital will be fully cared for in Mount Carmel. 

“Obstetrics patients scheduled over the coming days will also be fully cared for in Mount Carmel. All of these patients will be contacted by phone to confirm these arrangements.”

It said that obstetrics patients booked in for maternity services in the coming weeks and months will be transferred to alternative maternity hospitals.

A helpline and email facility has been set up to deal with queries from patients.

The helpline, 01-4086966, will operate from 9am-5pm daily. The email address is: mountcarmel@rsmfgs.ie

Sources said that while there had been two bids for the hospital, both contained so many caveats that they were not acceptable, and could have involved the risk of additional financial exposure for the taxpayer.

It is understood that the hospital had been hit by changes in the health insurance market, and the downturn in the economy. 

There is no indication yet of what redundancy terms will apply. 

Court hears patients are an ‘absolute priority’

The company sought to be wound up after what the court heard was “a disastrous 2013” and when NAMA decided it was no longer in a position to provide working capital to the company, which allowed the hospital to trade.

Judge Gilligan said he was satisfied to appoint the provisional liquidators after being informed that a plan had been put in place to protect, care and attend to the needs of the hospital’s 230 patients, 60 of whom are in-patients at the private hospital.

Solicitor for the provisional liquidators, Jane Marshall, told the judge that looking after the hospital’s patients was an “absolute priority” for her clients.

The court heard that the liquidators had worked on a plan with management at the hospital in advance of their appointment to ensure the patient’s safety and well-being would be in no way compromised.

In seeking the appointment of the provisional liquidators, lawyers for the company said it was seeking the appointment of the liquidators because it was hopelessly insolvent and unable to pay its debts as they fall due.

The court heard the hospital, which has been in existence since 1949 but was acquired by its current owners in 2006, has debts of more than €35m.

Its main creditors include NAMA, who in 2010 acquired a loan advanced to the company by AIB.

NAMA are supporting the application to have liquidators appointed.

Andrew Fitzpatrick, BL for the company, said that it had been able to trade in recent years thanks to funding provided by NAMA.

However in recent days, NAMA said it was no longer prepared to provide any more funds.

The company did not have the funds to continue to trade beyond next week.

The hospital was left with the option of either closing its doors immediately, which counsel said was “not an option”, or having liquidators appointed who would ensure an orderly winding up of the business.

Counsel said NAMA is prepared to fund the liquidation and orderly wind up of the business.

The matter will return before the court early next month.

In a statement, NAMA said that the Department of Health said last month that neither it nor the HSE proposed to enter into discussions with a view to purchasing it.

It continued: “Given that NAMA’s primary objective is to obtain the best possible financial outcome for the taxpayer and given that the sale is not proceeding, NAMA has decided that it can no longer continue to fund unsustainable losses at the hospital.”

Another private hospital, the Mater Private, has also warned that it is suffering adverse consequences from the changes to the health insurance market. 

Management and staff are today engaged in negotiations at the Labour Relations Commission over the hospital’s plans to make 95 staff redundant, and to close down the defined benefit pension scheme. 

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