CHICAGO - Investors holding $38 million of bonds issued on behalf of a Michigan hospital will likely end up receiving just $3.2 million under a deal announced last week allowing the cash-strapped facility to enter bankruptcy before being purchased by a for-profit group of physicians.

Located in the struggling city of Pontiac, the North Oakland Medical Center has defaulted on two of its three trustee payments so far this year. The facility has made only partial payments on its $1 million annual lease to the city, and officials listed the hospital's total debts as more than $100 million in bankruptcy filings last week.

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