St. Mary's Hospital in Passaic has until Nov. 6 to file a reorganization plan after the health care provider filed for Chapter 11 bankruptcy in early March.
U.S. Judge Morris Stern extended St. Mary's deadline to give the hospital more time to craft a strategy. St. Mary's creditors will have until Jan. 6 to approve the reorganization plan.
The New Jersey Health Care Facilities Financing Authority in 2007 sold $45.4 million of state contract bonds on behalf of St. Mary's to refund prior debt and help finance the takeover of the former Passaic Beth Israel Regional Medical Center.
The bonds are part of New Jersey's Hospital Asset Transformation Program, in which the state guarantees the debt if bond proceeds will facilitate the closing of an acute-care facility.
The program is designed to reduce the number of vacant hospital beds throughout the state.
The state made a debt service payment of $1.06 million on Sept. 1 to bondholders.
The next payment to investors is due on March 1 for $2.6 million, according to the authority's executive director, Mark Hopkins.
Since declaring bankruptcy, St. Mary's Hospital has not made monthly payments of $308,000, on average, to the health care authority to meet principal and interest payments.
