Claxton-Hepburn Medical Center and its Claxton Foundation endowment fund of $19 million went missing. Its parent organization, North Star Health Alliance, experienced a major financial and operational collapse stemming from severe cash flow shortfalls, billing cycle disruptions, and a dispute over state funding.
Core Financial & Bankruptcy Details
- Chapter 11 Filing: North Star Health Alliance—which operates Claxton-Hepburn Medical Center in Ogdensburg, Carthage Area Hospital, and Meadowbrook Terrace—officially filed for Chapter 11 bankruptcy on February 10, 2026.
- Escalating Losses: Court documents and restructuring reports revealed that Claxton-Hepburn accumulated massive financial losses over recent years, including $10.9 million (2022), $17.5 million (2023), and $30 million (2024).
- State Funding Dispute: The financial crisis deepened when the New York State Department of Health (DOH) paused or withheld vital assistance funds (such as Vital Access Provider Assurance Program payments) after North Star failed to submit required financial disclosures, audits, and expenditure breakdowns.
- Restructuring & Interventions: The health system has relied on court-approved cash collateral orders, emergency state payroll aid, and a subsequent $60 million state loan/financing package to keep hospital doors open, while implementing job cuts and scaling back certain services (like planned closures for labor and delivery)
By a former employee,
Rich Duvall, our CEO, and his best friend Rob Bloom and his company Wintergreen were our “financial advisor.”
They’ve been friends for years. The state gave us far more than 45 million dollars.
I’d say upwards of $150 million dollars; when bankruptcy was filed, we were around $120 million in debt still.
All while the C-suite team had company vehicles and were renting out luxury hotels for “provider retreats” in Clayton, NY.
Once Rich and Rob were gone, the state started giving us funding again.
Interesting.
He also did the same thing with Northern Oswego County Ambulance in Pulaski, NY.
Rich destroyed our rural hospital and the lives of so many people in Northern NY.
While nothing can be proven, it’s clear that saving businesses is not something he’s been successful at.
In its court filing, North Star argued that it required the services of Wintergreen as an “experienced financial and restructuring advisor”. It asked to be able to pay Wintergreen up to $240,000 dollars per month for their services.
Just days before former North Star CEO Richard Duvall resigned back in January, he formally agreed to this arrangement, which North Star lawyers asked the court to validate.
But Wintergreen has already been working for North Star for some time, at least a year, according to court documents.
Chief restructuring officer Rob Bloom,Wintergreen will step down from North Star
Wintergreen exit follows conflict-of-interest scrutiny, high compensation claims
Chief Restructuring Officer Rob Bloom and his Wintergreen company will step down from their obligations to North Star Health Alliance in 30 days, ending a $240,000-a-month contract for services.
The organization has led bankruptcy proceedings after more than 120 layoffs at Carthage and Ogdensburg hospitals, which North Star oversees.
It’s unclear who will replace them in the restructuring, but interim CEO Andrew Manzer will likely lead the process if a gap exists between Wintergreen’s end-of-month departure and their replacement.
Manzer said the decision came after discussions with Bloom and the organization. He also offered appreciation for Bloom and Wintergreen for their “professionalism, guidance and support,” during a critical period for the organization.
The Wintergreen exit comes as no surprise, as it has drawn public scrutiny after North Country This Week reported that former CEO Richard Duvall signed a contract for services with the company just weeks before the organization filed for bankruptcy.
Court documents showed several conflicts of interest between Wintergreen and North Star Health Alliance that were disclosed willingly by the organizations.
Additionally, former and current employees raised concerns about the close ties the organizations had with leadership and the fact that the company had been involved in managing North Star Health Alliance’s finances during its decline. Among these concerns were perceptions that compensation for services was abnormally high.
Days after North Country This Week reported on the conflicts and disclosed compensation numbers included in court documents, former Carthage Area Hospital CEO Walter Becker and State Assemblyman Scott Gray both openly opposed Wintergreen leading the restructuring.
Becker said keeping Rob Bloom in charge of the North Star Health Alliance’s restructuring “seems like appointing the fox to guard the hen house that he was manager of – only giving him more money,” in an email sent to Wintergreen officials that was obtained by North Country This Week.
Gray has a similar view.
“Against that backdrop, awarding Wintergreen an estimated $240,000 each month, with professionals billing at rates up to $450 per hour, is irresponsible, tone-deaf, and absurd when every dollar of operating cash is critical…” he said.
Most recently, Ogdensburg City Council supported calls to get Wintergreen out of the picture.
Wintergreen’s slow departure should allow a transition of duties to take place and will hopefully relieve a burden on North Star’s budget, which is projected to be more than $16 million in the negative by mid-May.
In a prepared statement, Manzer says they will continue providing services over the next 30 days.
Wintergreen’s fingerprints will remain on the restructuring for some time, however, as a restructuring plan is expected to be submitted to the court before next Wednesday.
The plan may need approval from the State Department of Health if it involves cutting certain services or shutting down portions of operations. Those options were mentioned but not confirmed as possibilities at a Wednesday bankruptcy court hearing.
At the hearing, Judge Wendy Kinsella urged all parties to get to the table and come up with a plan to keep the hospital open, but in an interview on WWNY, Commissioner Jim McDonald said North Star would need to find any potential affiliate on its own.
It’s a revelation that’s drawn criticism from Assemblyman Scott Gray, who said the statement should have been shared long before now.
He said changing the narrative this late in the game has left North Star with few options and little time to act.
Manzer said North Star will continue to share updates as restructuring efforts advance, which is a change of pace as the organization has not issued a media release in weeks.
North Country This Week has issued questions to the Department of Health regarding plans for affiliation and clarification on plans for intervention or meeting. The paper has also submitted an information request to the Department of Health for communications between the DOH Wintergreen and North Star officials. The request has not yet been granted.
The following statement is the only response provided.
“The Department is working closely with the North Star Health Alliance. Our teams have met daily as we work with them through this transition, with the primary focus being preserving patient access and safety. All facilities remain open and operational, and patients should continue to seek care as usual.”