BY JIMMY LAWTONNorth Country This Week

North Star Health Alliance was granted a fifth interim approval by the U.S. Bankruptcy Court to use cash collateral as they continue operating under Chapter 11, but only until tomorrow.

The court order allows the system to access funds only through March 18, following a strict budget that covers projected expenses and revenue.

According to the projections filed today March 17, North Star Health Alliance faces periods of negative net cash flow exceeding $6 million. Looking to the end of the 13-week period, the projections look a bit more grim.

Spending begins to exceed revenues for several weeks, and the consolidated cash balance turns negative, with total cash balances falling as low as negative $17.5 million in later weeks if no corrective action is taken. 

This deficit reflects ongoing operating expenses, payroll, physician fees, medical and pharmacy supplies, and other overhead costs, highlighting the continued reliance on creditor support.

To address the projected shortfall, the North Star says it will continue engagement with the New York State Department of Health to support operations, pursue debtor-in-possession (DIP) financing and evaluation of organizational downsizing to reduce cash demands.

“Management is actively pursuing solutions to mitigate the projected cash shortfalls, including exploring funding and restructuring options,” the document says.

The court order noted that cash cannot be used to pay pre-petition debts or contest creditor claims, and the system must file updated projections through June 12, 2026, today. 

On Friday March 13, North Star Health Alliance shared news that the Department of Health would be assisting with payroll. 

They also shared plans to cut ties with Wintergreen, a consulting firm, in which  Rob Bloom was a principal. The decision followed public backlash after court documents showed the company had conflicts of interest that were disclosed in court. 

The company had also drawn criticism from employees as well as Assemblyman Scott Gray due to the fact that Wintergreen's Bloom had been involved in the financial management prior to the bankruptcy. Although North Star is cutting ties with Wintergreen, the company will continue to provide services for the next month. It appears the interim CEO will replace Bloom as restructuring officer, but nothing appears to be official at this point.

On Monday March 16 St. Lawrence County Chairman David Forsythe and SLC Operations Committee Chair Rita Curran said they met with Department of Health Commissioner Jim McDonald who indicated that his department was working daily with North Star officials to ensure continued access to care.

DOH was also expected to meet with creditors and North Star officials to discuss a management plan prior to proceedings tomorrow, though it's unclear if that has or will take place.

Court will resume at 10 a.m. tomorrow March 18.

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