AN ACT RELATING TO HEALTH AND SAFETY -- THE HOSPITAL CONVERSIONS ACT (Authorizes the Superior Court to place a hospital into receivership upon action by the attorney general or department of health when a hospital is mismanaged, financially distressed, acting illegally, or endangering patient health and safety.)

H8364

2026 -- H 8364
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO HEALTH AND SAFETY -- THE HOSPITAL CONVERSIONS ACT

Introduced By:
Representatives Donovan, Speakman, Boylan, Spears, Kislak, Fogarty,
Knight, Diaz, and Potter

Date Introduced:
March 27, 2026

Referred To:
House Health & Human Services
(Attorney General)
It is enacted by the General Assembly as follows:
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SECTION 1. Chapter 23-17.14 of the General Laws entitled "The Hospital Conversions
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Act" is hereby amended by adding thereto the following section:
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23-17.14-37. Hospital receivership.

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(a) The superior court shall have the power to liquidate the assets and businesses of a
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hospital, defined as the legal entity licensed as a hospital under the laws of Rhode Island, pursuant
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to chapter 17 of this title, and any affiliates of the hospital that support the provision of care by that
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hospital (collectively “the hospital”), in an action by the attorney general or the department of health
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under this section when it is established that:
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(1) The hospital’s corporate assets are being misapplied or are in danger of being wasted
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or lost;
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(2) The hospital is being mismanaged, is in severe financial distress, or is insolvent;
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(3) The acts of the directors or those in control of the hospital are illegal, oppressive, or
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fraudulent; or
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(4) The hospital is being operated in a manner which will have a detrimental impact on the
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health, safety, or well-being of patients or their medical care.
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(b) It is not necessary to make shareholders, members, or other types of equity holders
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parties to an action or proceeding under this section unless relief is sought against them personally.
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(c) In proceedings under this section:
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(1) The court has general equity jurisdiction and power to:

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(i) Issue any orders, injunctions, and decrees that justice and equity require;
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(ii) Appoint a receiver or receiver pendente lite, with any powers and duties that the court,
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from time to time directs, including any or all powers available to a receiver under common law,
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the laws of this state, or the rules of its courts regarding receivership, as the court deems necessary
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and appropriate;
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(iii) Take any other proceedings that are requisite to preserve the corporate assets wherever
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situated, and to preserve health care resources and maintain patient safety and access to health care
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services, to carry on the business of the hospital until a full hearing can be had; and
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(iv) Take any other proceedings that are requisite to preserve the corporate assets wherever
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situated, and to preserve health care resources and maintain patient safety and access to health care
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services, during the pendency of the receivership.
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(2) The provisions of this section supplement, and in no way displace or limit, the general
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equitable powers of the court.
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(3) After a hearing had upon any notice that the court directs to be given to all parties to
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the proceedings and to any other parties in interest designated by the court, the court may appoint
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a receiver with authority to take charge of any of the hospital’s estate and effects of which he or
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she has been appointed receiver and to collect the assets of the hospital, including all amounts
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owing to the hospital whether by shareholders on account of any unpaid portion of the consideration
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for the issuance of shares or otherwise.
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(4) The hearing date for the appointment of a permanent receiver is not to be more than
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twenty-one (21) days after commencement of the action, unless the hearing date is extended by the
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court for good cause shown.
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(5) The receiver has authority subject to court order, to sue and defend in all courts in his
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or her own name as receiver of the hospital, or in its name, to intervene in any action or proceeding
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relating to its assets or business, to compromise any dispute or controversy, to preserve the assets
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of the hospital, to carry on its business, to sell, convey, and dispose of all or any part of the assets
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of the hospital wherever situated, either at public or private sale, to redeem any mortgages, security
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interests, pledges, or liens of or upon any of its assets, and generally to do all other acts which might
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be done by the hospital or that is necessary for the administration of his or her trust according to
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the course of equity. The assets of the hospital or the proceeds resulting from a sale, conveyance,
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or other disposition of the assets will be applied to the expenses of any liquidation and to the
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payment of the liabilities and obligations of the hospital, and any remaining assets or proceeds will
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distributed under the direction of the court among its shareholders according to their respective
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rights and interests. The order appointing the receiver sets forth their powers and duties. The powers

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and duties may be increased or diminished at any time during the proceeding.
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(6) The court has power to allow from time to time as expenses of the receivership
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compensation to the receiver and to attorneys in the proceeding, and to direct the payment of the
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compensation out of the assets of the hospital or the proceeds of any sale or disposition of the assets.
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(7) The court appointing the receiver has exclusive jurisdiction of the hospital and its
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property, wherever situated, and of all questions arising in the proceedings concerning the property.
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(8) A receiver shall in all cases give any bond that the court directs with any sureties that
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the court requires.
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(9) In any proceedings to liquidate the assets and business of a hospital, the court may
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require all creditors of the hospital to file with the receiver, in any form that the court prescribes,
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proofs under oath of their respective claims. If the court requires the filing of claims, it shall fix a
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date, which is not to be less than four (4) months from the date of the order, as the last day for the
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filing of claims, and shall prescribe the notice that is to be given to creditors and claimants of the
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fixed date. Prior to the fixed date, the court may extend the time for the filing of claims. Creditors
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and claimants failing to file proofs of claim on or before the fixed date may be barred, by court
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order, from participating in the distribution of the assets of the hospital.
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SECTION 2. This act shall take effect upon passage.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO HEALTH AND SAFETY -- THE HOSPITAL CONVERSIONS ACT
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This act would authorize the superior court to place a hospital into receivership upon action
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by the attorney general or department of health when a hospital is mismanaged, financially
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distressed, acting illegally, or endangering patient health and safety.
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This act would take effect upon passage.
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