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.Ex-Planned Parenthood Affiliate Goes Bankrupt

Golden Gate Community Health, which once served more than 50,000 patients a year, is liquidating its assets.

At its peak, Planned Parenthood Golden Gate had clinics in Oakland, Hayward, San Francisco, San Rafael, San Mateo, Redwood City, and Rohnert Park. Each year, the clinics assisted about 54,000 patients, the overwhelming majority of whom had little to no access to affordable medical care. The clinics also provided sex education to another 10,000 people annually, along with abortion services. But then last year, Planned Parenthood revoked its association with the clinics amid concerns of financial mismanagement. And now patients of the recently renamed Golden Gate Community Health will have an even more difficult time finding adequate health care, because the organization has filed for Chapter 7 bankruptcy and is going out of business.

Golden Gate originally planned to file for Chapter 11 bankruptcy, which would have allowed it to reorganize rather than liquidate its assets. But Bank of America and other financial institutions that had lent the clinics millions of dollars and held liens on Golden Gate’s property pushed for Chapter 7, said Andy Porter, a lawyer who is working with the organization through its bankruptcy. All employees have been let go. “It will be really difficult to reopen,” Porter said. “I think it’s over.”

According to court filings, Golden Gate lists $13.6 million in assets, and $12.6 million in debts, including nearly $10 million owed to financial institutions. The lenders probably will get all of Golden Gate’s funds from the planned asset sales, because the organization’s property likely will sell for less than its listed value due to the depressed real estate market. The quick liquidation may leave many employees still awaiting compensation with no hope of receiving what they’re owed — about $297,000 overall. “I believe the banks will get everything,” Porter said. “I would love to see if the real estate sells for enough to allow the employees to get paid. That would be a No. 1 priority.”

Still, it’s unclear who is owed exactly what because that information was sealed to protect the identities of employees, contracted physicians, and patients due to concerns of possible retaliation against people who either work at or patronize reproductive health clinics. Court documents in the case cited an incident in North Carolina where pro-life activists passed out “wanted” posters with the face of doctors known to perform abortions. Porter said sealing these types of records has become standard procedure for reproductive health clinics facing bankruptcy. Although Golden Gate clinics specialized in reproductive health, including family planning, and women’s health services, abortions accounted for only about 2 percent of its services.

The Chapter 7 bankruptcy also raises questions about what will happen to about 600,000 patient records. Patients will be notified by mail that they can pick up their records, but some records have “no-mail” provisions on them, meaning that the only way for patients to discover that they need to get their records is through publicized notices, Porter said. Because of limited storage, all records that are not picked up within one year will be destroyed.

After serving Bay Area residents for 88 years, Golden Gate’s demise was a turbulent journey. By 2003, the organization was running large deficits — $3.2 million that year, according to tax filings. But then from 2004 through 2007, Golden Gate revenues increased steadily. However in 2008, the organization fell back into the red, running a $2.2 million deficit, followed by a $2.8 million deficit in 2009.

Internal dissatisfaction over the way then-CEO Dian Harrison was handling the organization’s finances helped prompt a group of thirty doctors and clinicians to send a letter to Planned Parenthood expressing concerns in 2008, according to the Bay Citizen. Strife within the organization ultimately led to Harrison’s firing in the beginning of 2010 and the termination of her $340,000-a-year contract. However, Harrison then sued Golden Gate for failing to give her the lump sum of $205,000 in severance pay, along with medical benefits, promised in her contract. Harrison’s suit is one of nine pending legal and administrative actions against Golden Gate, including a US Department of Justice investigation into allegations of civil fraud.

Starting in March 2010, under then-interim CEO Therese Wilson‘s leadership, Golden Gate underwent a radical restructuring that resulted in a 33 percent reduction in operating costs, but by July, financial troubles were mounting to such a degree that Planned Parenthood warned the clinics that they were at risk of losing their affiliation. Then in September Planned Parenthood revoked its association with the clinics, marking the beginning of the end for Golden Gate.

By October, the organization started exploring Chapter 11 bankruptcy, and then made one last plea to the community for donations to keep stay afloat — but to no avail. On February 28, Golden Gate closed all of its clinics except for those in San Francisco, which shuttered four days later.

The sudden loss of services was a shock for patients, particularly for 50,000 Alameda County low-income residents who have government-issued health-care cards, known as PACT cards. The shuttered clinics also are unwelcome news for 171,430 uninsured county residents, many of whom are young adults and undocumented. However, in recent months, Planned Parenthood has been slowly making its way back into the East Bay to provide services to those affected by the closures.

On April 4, Planned Parenthood Mar Monte, which operates in San Mateo County and the South Bay, opened a clinic in Hayward where Golden Gate’s old clinic was. At the moment, however, the clinic is seeing patients just two days a week, and services are limited pending permits with the state, said Planned Parenthood Mar Monte spokeswoman Lupe Rodriguez. A clinic at Westminster Community Center in Hayward is also seeing patients twice a week, and plans are in the works to open a clinic in Oakland by the end of this year.

In addition, Planned Parenthood Shasta Pacific clinics in Richmond, El Cerrito, and Walnut Creek have received a flood of calls for service, said spokesman Adrian Verilli. At eight clinics in and around the East Bay, Planned Parenthood Shasta Pacific saw 1,300 more patients in March than in February, a 28 percent surge. Where Shasta Pacific clinics used to have an average wait time of one day for scheduling, it has since increased to a week or so. “It was quite a surprise,” Verilli said of Golden Gate’s closure. “We had no warning. We tried to schedule as many people as we could.”

Clinics as far away as San Jose and Mountain View also are now seeing more patients since Golden Gate shut down. “People are definitely trying to find a place to go,” Rodriguez said. “We understand there is a huge need for health care.”

But the increased demand for services has also come with an increase in resources. Since Golden Gate’s demise, donors have poured cash into Planned Parenthood affiliates around the East Bay. In fact, the campaign by social and religious conservatives to defund Planned Parenthood at the national level and in states across the country has ironically infused proponents of Planned Parenthood and women’s rights with renewed energy, resulting in 600,000 new supporters since the beginning of the year and large increases in donations, Verilli said. “It’s kind of the perfect storm turned perfect opportunity. People are really fired up.”

For now, Alameda County residents, particularly low-income and uninsured residents who were formerly Golden Gate patients, can contact one of Planned Parenthood’s clinics in and around the East Bay, La Clinica in Oakland, Women’s Community Clinic in San Francisco, and the Berkeley Free Clinic. “Any time a health care provider has to shut its doors, there’s a short-term [health care] access problem we never want to see happen,” Verilli noted.


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