The head of Highmark Inc. has testified the insurer offered the Pittsburgh-based West Penn Allegheny Health System an extra $125 million in financing so it would file for Chapter 11 bankruptcy in hopes of reducing the hospital network's $1 billion debt.
Highmark CEO William Winkenwerder testified Thursday that Highmark believed state insurance regulators wouldn't approve Highmark's proposed $475 million takeover unless West Penn could reduce its debt. The $125 million was offered in addition to that original amount.
More testimony was expected Friday in Highmark's lawsuit seeking to keep West Penn from negotiating with any other suitors.
West Penn executives have argued the bankruptcy demand by Highmark breached the pending $475 million takeover deal. But some West Penn doctors affiliated with the financially struggling hospital network have since said they want to keep the deal alive.