Graves Gilbert Clinic files for bankruptcy after malpractice verdict

BOWLING GREEN, Ky. (WBKO) - Graves Gilbert Clinic has filed for bankruptcy citing a medical malpractice verdict of $21.3 million as the reasoning.

The clinic filed for Chapter 11 bankruptcy on Thursday in the U.S. Bankruptcy Court for the Western District of Kentucky.

Court documents indicate that the clinic has a need to meet the obligations to its employees and business operation.

Court documents also show that Steven Sinclair, the Chief Financial Officer for the clinic submitted verification that a medical malpractice complaint was filed on May 30, 2014, against Dr. Tage F. Haase, the Commonwealth Regional Specialty Hospital, Inc., Bowling Green-Warren County Community Hospital Corporation, The Medical Center at Bowling Green and Graves Gilbert Clinic.

The malpractice complaint was filed in Warren Circuit Court by Alice and Lloyd Duff, who claimed that Alice developed complications from an elective hernia surgery.

Court documents indicate that the complications Alice experienced left her legally blind.

On July 29, a jury entered a verdict against GGC for $21.3 million, which was $13.3 million for Alice and $8 million for Lloyd.

In his statement to the court, Sinclair said that the clinic intends to appeal the verdict.

“Based on the errors in the verdict and judgement, I believe they will be overturned on appeal,” Sinclair wrote in court documents. “”I trust the legal process to address the mistakes that prevented a fair trail in the State Court Action.”

Sinclair’s statement also says the filing will allow GGC to consider restructuring alternatives.

A list of the clinic’s top 20 “unsecured creditors” was also submitted to the court showing a total of over $28 million with U.S. Bank listed as the “top secured creditor” with $22 million owed.

Financial records submitted to the court show that GGC generated $200 million in gross receipts during 2021 with a profit of $150,041 after inclusion of from pandemic related relief funds and a refund of certain medical fees.

GGC Chief Executive Officer Chris Thorn released a statement saying that “despite these challenges, our doors are not closing.”

“We want to reassure our patients and staff that we remain committed to caring for the medical needs in this community for many years to come,” Thorn wrote.

In a statement sent to the clinic employees Thorn and president Dr. Jerry Roy emphasized that the clinic is not closing.

“Our patients will keep their doctors, keep their appointments and keep depending on Graves Gilbert for excellent healthcare,” according to the memo sent to employees. “It is business as usual.”

The statement also said the clinic’s Board of Directors made the decision to reorganize under court protection following the malpractice verdict in large part to rising claims against healthcare providers across the nation.

“For whatever reason, during the pandemic years, juries have become far more inclined to return what the legal community calls ‘nuclear verdicts,’” according to the memo. “Our clinic has not escaped this phenomenon, and we must take steps to insure the Clinic’s viability in the face of potential future threats of this kind.”

According to court documents, the next hearing scheduled is for Jan. 24.

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