North Star Health Alliance, Inc.

The four affiliated debtors led by North Star Health Alliance, Inc. are mid-restructuring in the U.S. Bankruptcy Court for the Northern District of New York, operating under a finalized postpetition financing package and an extended exclusivity window while they work toward a Chapter 11 plan. The court entered final DIP and cash-collateral orders in late June 2026 and, days later, extended the debtors' exclusive plan-filing period to October 8, 2026, with solicitation running through December 7, 2026.

North Star and its three operating affiliates — Carthage Area Hospital, Claxton-Hepburn Medical Center, and Meadowbrook Terrace — filed jointly administered petitions on February 10, 2026 after a multi-year internal reorganization known as "the Transition," which split Claxton-Hepburn into a 40-bed psychiatric hospital and shifted a critical-access campus to Carthage. The reorganization triggered a revenue-cycle breakdown, a sharp run-up in accounts-receivable days, a roughly $30 million 2024 operating loss at Claxton-Hepburn, and near-total turnover of the accounting and finance staff, leaving the system reliant on New York State Department of Health VAPAP advances to meet payroll CRO DeclarationDkt. 47.

Prepetition funded debt totaled approximately $48.5 million across sixteen secured obligations, anchored by a $25 million Dormitory Authority of the State of New York loan at Carthage and roughly $3.9 million in Northern Credit Union loans at the parent CRO DeclarationDkt. 47. Postpetition, the debtors progressed from a string of interim cash-collateral orders capping spending at 110% of budgeted line items to a $45 million final DIP facility and final cash-collateral authority running through year-end 2026 . Authority to draw beyond the interim threshold and to repay roughly $15 million in VAPAP state advances remains unadjudicated and adjourned for further proceedings.