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If a Hospital in New York Goes Bankrupt Can You Still Sue for Injuries You Suffered at the Hospital?



The answer is "Yes you can, but..." there are many twists and turns in such a lawsuit. A lawsuit against a hospital that has already declared bankruptcy is a challenge. It will take much longer to resolve than if the hospital was not in bankruptcy.

Let's say you have a valid medical malpractice case against a hospital in New York. You learn that the hospital recently declared bankruptcy but is still operating. Can you bring a lawsuit?

Yes you can.

However, many obstacles will be thrown in your way.

The first is that after filing the lawsuit, we will be notified by the bankruptcy trustee or their attorneys that nothing can happen on your case because of the bankruptcy. In legal terms it means that any legal action is 'stayed'. Once we have identified who is the bankruptcy trustee; that's the person appointed by the bankruptcy judge to oversee the bankruptcy proceeding in bankruptcy court, we then need to find out whether there's any available insurance for the incident you are complaining about.

If there is insurance available, then we formally request that the bankruptcy court allow us to continue the lawsuit and only seek whatever insurance money is available. We must promise the court that we will not seek any other asset of the bankrupt hospital in your lawsuit. If the bankruptcy judge agrees with our proposed plan, then the judge will give us permission to proceed forward with your lawsuit and only look to the available insurance proceeds if you are successful with your lawsuit.

What happens if there's no available insurance coverage?

You will have a very long and difficult time getting the hospital to pay you full compensation for your injuries, assuming you can prove your case. If you are successful, you are likely to receive only pennies on the dollar for your injuries.