Former nurses and employees at Bay Area Regional Medical Center have reached a preliminary settlement agreement for almost $12 million with their former employer, Galveston attorneys announced Wednesday.
A Galveston and New York law firm representing the former employees argued in the hospital’s bankruptcy proceedings that the business violated the Worker Adjustment and Retraining Notification Act of 1988, which requires an employer to give employees 60 days notice before either closing a plant or mass layoffs if more than 100 people will lose their jobs, said Jonathan Zendeh Del, an attorney representing the plaintiffs.
The plaintiffs’ attorneys worked with a trustee for the company’s bankruptcy to reach the preliminary settlement in the U.S. District Court for the Southern District of Texas bankruptcy court in McAllen, Zendeh Del said.
The preliminary agreement lists 920 people who could be eligible for settlement money, Zendeh Del. The agreement will become final during a fairness hearing tentatively set for Sept. 18.
Under the terms of the settlement, the former employees are eligible for a total of about $11.82 million in claims, records show. However, after attorney fees and other expenses, the employees are eligible for about $7.83 million, or about $8,500 each.
“There was a lot of work put into the case by everyone,” Zendeh Del said. “The bankruptcy trustee and our co-counsel were great to work with. This was a large case, and we were happy to handle it for our clients.”
After the Sept. 18 hearing, attorneys will begin examining the hospital’s assets to determine how much money those former employees might one day receive, Zendeh Del said. That process might take as long as six months or a year.
The 373,000-square-foot facility at 200 Blossom St. in Webster employed more than 900 people when it closed. The hospital is operated by Houston-based developer Medistar, officials said.
The center opened in 2014 with more than 100 patient beds. By 2017, the hospital had expanded to hold 191 beds. The hospital included surgery suites and a neonatal unit.
The hospital opened as the Clear Lake region was seeing a surge in medical care facilities of all kinds, including a patient tower at the Clear Lake Regional Medical Center and an expansion at the University of Texas Medical Branch’s Victory Lakes facility.
The hospital abruptly closed its doors in May 2018. The company filed for Chapter 7 bankruptcy in January 2019.
The University of Texas Medical Branch later reached an agreement to rent the building and opened a new hospital in March 2019.
The medical branch will pay $210 million in rent for the facility, renamed the UTMB Health Clear Lake Campus, over the next 15 years, officials said. The lease includes an option to buy the building after five years, according to the agreement.
A full-service hospital, the new medical branch campus hosts 87 medical-surgical private patient rooms with capacity to expand to 191 rooms, provides 30 intensive care unit and intermediate care beds, has 23 private emergency rooms including three for trauma, has eight operating rooms, houses three interventional suites for cardiac procedures and has interventional radiology, neurology and endoscopy suites.