What is the obligation of a trustee when a health care facility files chapter 7 and it is a no-asset case?
If the health care facility is in the process of closing at the time the chapter 7 case is filed, then pursuant to 11 U.S.C. § 704(a)(12) the trustee, in both asset and no-asset cases, must “use all reasonable and best efforts” to transfer patients to another health care business in the vicinity that provides patients with similar services and a reasonable quality of care. Trustees are encouraged to work with the State agency with regulatory authority over the facility to assist with patient transfer. The trustee must obtain an operating order before any patient transfer is accomplished. Patient records must either be stored by the trustee or, if insufficient estate funds are available, disposed of by following the requirements set forth in § 351. Section 351 procedures requires the trustee to: (i) publish notice that if the patient records are not claimed within 365 days from the date of the notice they will be destroyed; (ii) attempt to notify patients and insurance carriers directly
