JFL Ordered to Pay $6.36M for Breached Equipment Lease

A Michigan federal court has issued a $6.36 million judgment against Governor Juan F. Luis Hospital and Medical Center and the Virgin Islands Government Hospitals and Health Facilities Corporation for defaulting on a medical equipment lease.

U.S. District Judge Brandy R. McMillion handed down the ruling on September 22. The decision, registered this week in the District Court of the Virgin Islands, clears the way for enforcement proceedings in the territory.

The dispute centres on a two-year lease agreement signed in April 2025 between JFL and two leasing firms, VFI KR SPE I LLC and Varilease Finance, Inc. The lease covered roughly $6 million in medical equipment and required monthly payments of $149,400.

According to court filings, the hospital fell behind on payments starting in November 2025 and made no payments for the following three months. JFL also failed to supply audited financial statements for 2021 through 2025, as the lease required.

In late February, the leasing companies notified JFL of the defaults and demanded return of the equipment. Neither payment nor equipment materialised, the lawsuit stated.

When JFL and the territorial hospital corporation received the lawsuit in April, they did not file a response. The court entered defaults against both on May 6. At a September 21 hearing, with neither defendant present, Judge McMillion approved the creditors' request for default judgment.

The equipment list spans hospital beds, patient monitors, ventilators for adults and infants, operating tables, ultrasound scanners, infant incubators, sterilisation systems, laboratory tools, surgical instruments and a nurse-call system.

The judgment requires JFL to return all equipment by October 22. It also grants the creditors an all-asset lien on the hospital's property, giving them immediate access to assets tied to a financing statement filed in May 2024.

On top of the $6.36 million award, the court imposed 13 percent annual interest, awarded $22,250 in legal fees and $2,388.88 in court costs. The monetary judgment will be reduced by whatever the equipment brings in when resold or seized.

The ruling comes as JFL grapples with severe financial strain. In August, the hospital disclosed approximately $45.6 million in outstanding obligations, including $22.9 million owed to vendors and $22.7 million in employee-related debts.

Separately, Worldwide Travel Staffing has pursued a $12.14 million judgment against the territorial hospital corporation for unpaid staffing invoices.

Governor Albert Bryan Jr. has asked the legislature to approve a $250 million bond package that would allocate $40 million to JFL for outstanding debts and service continuity. The administration introduced the proposal on October 23, but it awaits legislative action. Officials have not disclosed whether any of JFL's share would go toward satisfying the Michigan judgment.