PASSAIC, NJ – St. Mary's Hospital in Passaic, N.J., has completed a reorganization plan and appears to be on its way out of Chapter 11 bankruptcy status.

The United States Bankruptcy Court for the District of New Jersey this week confirmed the Plan of Reorganization for St. Mary's. The hospital is the first to emerge from Chapter 11 bankruptcy in New Jersey.

"Having stabilized our financial situation, we anticipate fiscal growth in 2010 and look forward to reestablishing St. Mary's as a vital community resource," said William T. Cusick, St. Mary's chief financial officer.

Since 2007, six New Jersey hospitals have filed for bankruptcy, five of which have either closed or sold their assets.

Michael J. Sniffen, St. Mary's president and CEO, said the hospital's successful Chapter 11 restructuring shows that it is possible to file for bankruptcy, reorganize and emerge from bankruptcy.

"After less than one year, we emerge revitalized, improved and re-committed to serving the community and the physicians that have so loyally supported us through this difficult process," Sniffen said. "We have already laid the groundwork for renewal by acquiring new technology for our cardiology and oncology programs and expanding other key services."

Robert K. Malone of Drinker Biddle & Reath LLP, the lawyers for St. Mary's in connection with its reorganization efforts, said the process was a "truly collaborative effort" that required strong leadership from hospital administration and cooperation with various stakeholder groups. He said the reorganization should also serve as a model for other hospitals that may be forced to undergo reorganization.

"The creditor support shown by all, including the state of New Jersey, the unions and the hospital's vendors, made this happen," he said.

St. Mary's is a nonprofit acute care hospital with 292 licensed beds and more than 550 physicians. The facility is sponsored by the Sisters of Charity of Saint Elizabeth of Convent Station, N.J.