FOR IMMEDIATE RELEASE
ST. CROIX, U.S. VIRGIN ISLANDS (October 30, 2026) — Gov. Juan F. Luis Hospital & Medical Center (JFL) and the Virgin Islands Government Hospitals and Health Facilities Corporation (GHHFC) are providing an update regarding the approximately $6 million financing agreement with Varilease Finance, Inc., the resulting $6.36 million Michigan court judgment, and efforts by creditors to pursue hospital funds, equipment, and other assets.
JFL and GHHFC understand the concern this situation has caused among patients, families, healthcare workers, and the wider St. Croix community. We recognize that the issues surrounding this agreement affect more than the hospital’s finances; they involve the services and resources our community relies on every day.
Financial Hardship and the Need for Funding
In 2024, JFL faced severe financial hardship, including mounting vendor obligations, payroll demands, and essential operating expenses. With limited financing options available, the hospital needed immediate funding to meet its obligations and continue providing healthcare services to the St. Croix community.
It was under these circumstances that JFL entered into an approximately $6 million financing agreement with Varilease Finance, Inc. The agreement was structured as a sale-leaseback involving equipment JFL already owned and used in its operations.
The agreement’s provisions involving hospital equipment and assets have understandably raised concerns within the community. Those provisions, including the rights creditors are seeking to enforce, are now part of the ongoing legal proceedings.
Chris Finch, former Chair of the GHHFC Territorial Board, current Chair of the St. Croix District Governing Board, and Secretary of the GHHFC Territorial Board, stated: “This agreement has raised difficult but important questions, particularly about the potential impact on hospital resources. We understand those concerns and recognize the seriousness of the situation facing JFL. We are committed to ensuring these matters receive the careful attention they deserve, that the hospital’s interests are appropriately represented throughout the legal process, and that the needs of our patients, employees, and community remain central to every decision we make.”
Under the agreement, JFL was required to make 48 scheduled payments of $149,400. JFL previously reported approximately $2.9 million in payments toward the agreement. Following a recent reconciliation of financial records that accounts for additional payments made in late September and October 2026, the total amount paid to date is $3,018, 815.03.
Scheduled payments were maintained through October 2025. Subsequent financial pressures, compounded by the cyberattack, affected the hospital’s ability to maintain the original amounts. Between December 2025 and October 2026, JFL made one payment of $50,000 and nine payments of $20,000.
Response to the Michigan Court Proceedings
GHHFC recognizes the concerns surrounding its nonappearance in the Michigan court proceedings and the default judgment that followed. The decision not to appear was made following advice from legal counsel based on questions concerning service of process and the Michigan court’s jurisdiction.
While those legal considerations informed the Corporation’s approach, GHHFC recognizes the significance of the resulting judgment and the concerns it has raised about JFL’s financial stability and assets.
The Corporation is now addressing the matter through proceedings in the District Court of the Virgin Islands. Legal counsel has entered an appearance on GHHFC’s behalf, and additional motions are expected as the Corporation examines the legal issues and available options.
GHHFC remains committed to addressing this matter through the appropriate legal channels and keeping the public informed as developments permit.
Status of Hospital Equipment, Funds, and Assets
The Michigan judgment includes provisions requiring the return of equipment identified in the agreement and granting creditors rights concerning assets covered by their security interests.
Following registration of the judgment in the District Court of the Virgin Islands, creditors sought authorization for marshals to seize funds in Banco Popular accounts associated with JFL and GHHFC, as well as other assets covered by their claimed security interests.
On October 29, Chief Judge Robert Molloy directed the creditors to establish the legal basis for the requested seizure by November 13, 2026. The court has not yet determined whether the requested enforcement action is permissible.
As of the issuance of this release, no hospital equipment or assets have been seized or removed in connection with this matter.
Moving Forward: Financial Accountability and Sustainable Healthcare Funding
JFL leadership recognizes that addressing the current legal matter must go hand in hand with stronger financial oversight and long-term planning.
Darlene Baptiste, Chief Executive Officer, stated: “I recognize that I have inherited challenges and agreements that must now be addressed. My responsibility is not only to manage those matters, but also to help establish a more sustainable path forward. Financial agreements that place essential hospital resources at significant risk must be subject to careful review and oversight. We are committed to strengthening our financial practices, improving accountability, and pursuing solutions that support the long-term stability of our hospitals.”
The circumstances surrounding this agreement also highlight the broader financial challenges facing public healthcare in the Virgin Islands.
JFL serves a patient population with a payer mix heavily weighted toward Medicare and Medicaid. While these programs are essential to healthcare access, reimbursement does not necessarily cover the full cost of providing hospital services. The hospital must also meet payroll, maintain facilities and equipment, purchase medical supplies, and provide care to patients regardless of their insurance status or ability to pay.
These realities underscore the need for a sustainable healthcare funding structure that reflects the actual cost of delivering care in the Virgin Islands. JFL and GHHFC welcome continued engagement with the Legislature, the Administration, and the community on long-term solutions.
We also recognize the dedication of JFL’s nurses, physicians, allied health professionals, support staff, and other healthcare workers who continue serving the St. Croix community despite the financial challenges facing the organization.
JFL and GHHFC remain focused on addressing the current matter responsibly, strengthening financial accountability, and supporting the long-term stability of healthcare services for the people of the Virgin Islands.
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Media Contact
Communications & Public Relations Office
Gov. Juan F. Luis Hospital & Medical Center
communications@jflusvi.org
(340) 778-6311 ext. 5736
