Meanwhile, the resolution is not the end of CMC's woes. From 2004 to 2008, it only carried the state-mandated minimum of $1.2 million in medical malpractice insurance. And since 2004, CMC has been sued for medical malpractice more than 50 times. Though many of the cases never made it to trial, some are still pending.

"If they did an asset deal, the buyer would own all of the hospital's buildings, land and equipment," Mr. [Josh Nemzoff] said. "Any debt would remain the hospital board's responsibility."

CMC's financial situation seems to be turning around, too. In 2007, CMC earned $4.28 million, according to previous news stories. The hospital projected $7 million in earnings for 2008, but information about whether it reached that projection was not available from hospital officials.