Judge Dismisses Lawsuits By 2 Bankrupt Maine Hospitals Seeking Federal Relief Funds

The BDN is making the most crucial coverage of the coronavirus pandemic and its economic impact in Maine free for all readers. Click here for all coronavirus stories. You can join others committed to safeguarding this vital public service by purchasing a subscription or donating directly to the newsroom. A judge has dismissed the lawsuits filed by two bankrupt Maine hospitals that haven’t been allowed to receive funds from a federal loan program aimed at propping up businesses during the coronavirus pandemic. Now, the hospitals hope that Maine’s congressional delegation may be able to find a solution to their financial challenges. In late April, Calais Regional Hospital and Penobscot Valley Hospital in Lincoln both warned that they could have to close their doors by the end of June without funds from the Paycheck Protection Program, which offers forgivable loans to help businesses keep their staff employed through the pandemic. The Small Business Administration’s interim rules for the program bar any applicants in bankruptcy proceedings from applying for the loans, which are extended by commercial banks with backing from the federal government and can be forgiven if at least three-quarters of the funds are spent on payroll and wages, among other conditions. The two hospitals have more recently found some breathing room and do not expect to immediately close, after they each received funds totaling at least $3.5 million from separate federal coronavirus stimulus programs, according to court records.