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Honolulu Medical Group bankrupt


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POSTED: Tuesday, November 03, 2009

Honolulu Medical Group Inc. has filed for Chapter 11 bankruptcy reorganization, listing assets of less than $50,000 and liabilities ranging from $1 million to $10 million.

Founded in 1903 by Drs. James Judd and W.D. Baldwin and the first medical facility established in Hawaii, HMG is now owned by three shareholder-physicians: Scott Himeda, David McEwan and Steven Sameshima. It is led by President Kimberly Rocha and treats 75,000 patients a year in multiple specialty practices offered by the shareholder-physicians and about 10 others.

“;We don't expect any interruption in operations or services”; for its patients or 29 employees, said James Wagner, HMG's bankruptcy attorney.

The Honolulu Medical Group once employed dozens of physicians and occupied an entire building, but now leases one floor of Queen's Physicians Office Building III.

HMG's largest debt by far, $742,469, is owed to its landlord, The Queen's Development Corp.

“;That is the crux of the matter,”; said Douglas Inouye, corporate attorney for The Queen's Health Systems. The arrearage had been growing for some 10 months, he said.

Wagner cited the near-unavoidable national debate on health care costs as a reason HMG fell so deeply behind.

“;They were saddled with excessive space, which meant excessive rent, and because the size of the practice continued to dwindle ... the burden of paying the rent became too great,”; he said.

Other creditors include Diagnostic Laboratory Services and the Internal Revenue Service.

In its bankruptcy petition, Honolulu Medical Group states that it is unlikely any funds will remain for distribution to unsecured creditors. Wagner estimated HMG would emerge from bankruptcy in six to nine months.