CHICAGO - Pontiac, Mich., approved a measure last week that paves the way for a financially strapped hospital that defaulted on recent payments owed to the trustee on $38 million of outstanding bonds to move forward with plans to file for bankruptcy and enter into negotiations with a for-profit physicians' group interested in acquiring the facility.

The Pontiac City Council last week approved the North Oakland Medical Center's long-sought request only days before the hospital said it would be forced to file for Chapter 7 liquidation proceedings. The approval moves the facility closer to severing its costly lease with the city and the Pontiac Hospital Finance Authority after years of mounting operating losses.

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