DSI facility files for Chapter 7

Company's first and recently closed prefab facility shows large deficit, lists local co-debtors

A Pennsylvania specialty breast cancer hospital run by Diversified Specialty Institutes has filed for Chapter 7 listing a handful of local co-debtors that includes former Genesco CEO Doug Grindstaff.

In the filing, available here, the Bucks County Oncoplastic Institute north of Philadelphia lists assets of just under $14 million set against liabilities of nearly $38 million. Additionally, certain assets listed in the filing are marked as having already been “repossessed/foreclosed on,” among them $11 million worth of machinery and fixtures.

Bucks County, which represented downtown-based DSI’s first foray into the prefab hospital market when it launched in 2006, faced criticism at the outset that the area was already “over-bedded.” The state of Pennsylvania, however, scrapped its certificate-of-need requirements more than a decade ago.

As was previously reported – industry newsletter Inside Baseball first wrote about DSI's troubles several months ago – and what the filing makes clear is that the facility was never able to attract enough business to cover its costs.

DSI’s largest business is dialysis clinics. The company bought 100 clinics from Fresenius Medical AG as part of the divestiture that came with that company’s purchase of Renal Care in 2006.

Serving as the bankruptcy attorney for the facility is Glenn B. Rose of Harwell, Howard, Hyne, Gabbert & Manner.