Mizell Memorial Hospital - Chapter 11 Case Summary

Business Description

Headquartered in Opp, AL, Mizell Memorial Hospital, Incorporated (the "Debtor") operates Mizell Memorial Hospital (the "Hospital"), a non-profit, 99-licensed bed general acute care hospital located at 702 Main Street, Opp, Alabama 36467.

• The Hospital serves the residents of Covington County and surrounding communities in south-central Alabama.
• Mizell Memorial Hospital has served this community for more than 76 years and is one of the largest employers in Covington County, with approximately 273 employees and medical staff members.

The Debtor is a non-profit corporation organized under the laws of the State of Alabama and is governed by a Board of Directors consisting of 11 members.

---

Operations Overview

The Hospital operates a 24-hour emergency department, seeing approximately 10,772 ED visits per year, and provides a full continuum of services including medical-surgical, intensive care, surgery, radiology, geriatric and geriatric psychology, laboratory, cardiopulmonary, physical therapy, swing-bed, and specialty clinic services.

• Annual inpatient admissions are approximately 26,228, and annual outpatient visits are approximately 20,016.
• The Hospital is accredited and licensed by the Alabama Department of Public Health.
• The Debtor participates in the Medicare and Medicaid programs and is a party to provider agreements with each.

Revenues and Payor Mix

The Debtor's audited gross patient service revenue for fiscal year 2025 was approximately $6,799,600. The Debtor's payor mix is heavily weighted toward Medicare, Blue Cross Blue Shield, and Medicaid, with the following composition of net revenue:

• Approximately 66% from Medicare.
• Approximately 17% from Blue Cross Blue Shield.
• Approximately 9% from Medicaid.
• Approximately 4% from commercial payors.
• The balance from self-pay and other sources.

---

Prepetition Obligations

As of the Petition Date, the Debtor's capital structure consists of, among other things, the following obligations:

Secured Debt

• Approximately $3,923,844.83 in aggregate principal amount of secured debt is owed to the City of Opp/Regions Bank and the USDA.
• Lines of credit owed to Southern Independent Bank in the aggregate amount of $2,045,000.

Unsecured and Other Obligations

• Unsecured trade payables and judgments in the approximate aggregate amount of $1,848,000.
• Accrued but unpaid wages, benefits, and payroll-related obligations in the approximate aggregate amount of $365,000.
• Accrued but unpaid federal, state, and local taxes in the approximate aggregate amount of $70,000.
• Outstanding capital and operating leases totaling $625,000.

---

Events Leading to Bankruptcy

Industry-Wide and Debtor-Specific Pressures

The Debtor's decision to commence this Chapter 11 Case was driven by a confluence of industry-wide pressures and Debtor-specific financial challenges, including:

• Declining reimbursement rates from governmental payors combined with high fixed costs typical of rural acute-care hospitals.
• An increasing share of uncompensated and undercompensated care, including emergency services to uninsured and underinsured patients.
• Sustained wage and benefits inflation and nursing shortages.
• Lingering financial and operational impacts of the COVID-19 public health emergency, including delayed elective procedures and revenue volatility.
• Increases in the cost of pharmaceuticals, supplies, and utilities.
• Adverse civil commercial dispute and legal judgments.
• Resulting liquidity shortfalls that made it impossible for the Debtor to continue to meet current operating and debt-service obligations outside of Chapter 11.

Out-of-Court Initiatives

In the months leading up to the Petition Date, the Debtor and its advisors implemented a series of cost-reduction and revenue-enhancement measures, including service line consolidation, renegotiation of payor contracts, workforce reductions, and engagement of revenue-cycle consultants. Although these measures produced meaningful improvements, they were not sufficient in the aggregate to resolve the Debtor's liquidity and capital-structure challenges.

Chapter 11 Filing and Go-Forward Strategy

After exhausting available out-of-court alternatives, the Debtor's Board of Directors authorized the filing of this Chapter 11 Case on April 29, 2026, in the U.S. Bankruptcy Court for the Middle District of Alabama, Northern Division, to restructure the Debtor's obligations, preserve the Hospital as a going concern, protect access to essential healthcare services for the community, and maximize value for the Debtor's stakeholders.

• The Debtor intends to continue to deliver safe, high-quality patient care without interruption.
• The Debtor seeks to stabilize its liquidity through the use of cash collateral and/or debtor-in-possession financing.
• The Debtor will evaluate strategic alternatives, including a potential sale, strategic partnership, or standalone reorganization.
• The Debtor intends to propose and confirm a plan of reorganization, or consummate a sale under section 363 of the Bankruptcy Code, on a timeline appropriate to the circumstances of this case.