Criminally Indicted TX Mental Hospital Chain Declares Bankruptcy

February 5, 2019

A North Texas mental health institution with hospitals in Garland, Fort Worth and Arlington has filed for bankruptcy months after being indicted in a criminal case over illegally detaining patients.

Sundance Behavioral Healthcare System filed for Chapter 11 bankruptcy Thursday. The system faces 20 charges of violating state mental health codes after being indicted in November and December.

In December, Sundance stopped accepting patients at its hospitals and “voluntarily brought its patient count to zero,” its attorneys said.

The corporation announced that it had surrendered its license on Dec. 21 to the state. Attorneys said the hospital could not financially sustain its services in light of the court proceedings.

Nearly all of the 20 charges against Sundance relate to holding patients against their will at its Arlington location. The indictments were delivered in two rounds, with nine brought in November and 11 more in December.

They include allegations that the hospital failed to help patients create written requests for discharge, detained a minor without a guardian’s consent and illegally held a patient for more than the maximum of 48 hours.

The alleged violations took place between January 2017 and November 2018 and relate to 11 patients. Sundance said in November that the indictments were a case of “unprecedented overreach” and will have a chilling effect on hospitals.

Source: “Mental hospital accused of holding Texas patients against their will has filed for bankruptcy,” Dallas Morning News, February 2, 2019, URL: https://www.dallasnews.com/news/courts/2019/02/01/north-texas-mental-hospital-facing-criminal-charges-files-bankruptcy