Charter Behavioral Health and 101 Units File Bankruptcy

Charter Behavioral Health Systems LLC and 101 affiliates, which are 90 percent owned by Crescent Operating Inc. and 10 percent by Magellan Health Services Inc. filed for Chapter 11 protection Wednesday, according to Reuters newswire.

In court papers filed at the U.S. Bankruptcy Court in Delaware, Charter -- which runs the largest chain of psychiatric hospitals in the United States -- estimated it had assets of up to $50 million and debts of more than $100 million. Claims of the 20 largest unsecured creditors ranged from $430,000 to $2.4 million, all either trade or professional fees.

In a statement Wednesday, Charter, based in Alpharetta, Ga., said that it closed 33 hospitals earlier this month, but continued to operate another 37 hospitals. Charter said it expected to sell the 37 hospitals, its core assets, through a bankruptcy court auction and the COPI Healthcare subsidiary of Crescent had agreed to buy the assets.

Calls to Charter and Crescent were not immediately returned, Rueters said.

Crescent, of Fort Worth, Texas, was created in 1997 by the head of Crescent Real Estate Equities, Richard Rainwater, to operate what was then a 50 percent interest in Charter. Rainwater is a former business associate of Texas Gov. George W. Bush. Magellan, of Columbia, Md., is the largest specialty managed care organization in the United States.