With the recent death of Bill Graham, it is worth remembering the remarkable job that he did in rescuing the Martha’s Vineyard Hospital from its bleakest moment 20 years ago.

In April of 1996, Windemere, which was built with an $8.5 million bond, filed for Chapter 7 bankruptcy. Windemere was intended to provide a financial boon to the hospital, but in fact it had never made a single payment on its debt. The Chapter 7 bankruptcy meant liquidation, not reorganization. In May of 1996, four hospital trustees resigned. In June it was disclosed that a significant portion of hospital endowment funds had been spent. In July, the Massachusetts Attorney General announced that he was launching an investigation into the “looting” of the endowment. The same month the chief executive officer and chairman of the board of the hospital also resigned.

This was the hospital’s darkest hour.

One night during this nightmare, I had dinner at Bill Graham’s house. I described the events that were happening at the hospital and how bleak everything looked.

The next day, Bill called me to say that he and his mother Katharine Graham were willing to contribute money, and that he was willing to serve on an emergency board. We convened a meeting at my house, with Bill Graham, Gerry DeBlois, Tony Fisher, Lenny Jason, Dr. Russell Hoxsie and numerous others. The acting CEO and CFO of the hospital was there and brought us up to date on the financial status of the institution. The group came to the reluctant conclusion that the hospital also was bankrupt. The people in the room agreed to serve on an emergency board. A short time later most of the remaining board members resigned, and the emergency board was voted in to steer the hospital on an interim basis. Dr. Hoxsie and Bill Graham would lead. Soon Dr. Hoxsie stepped aside and Bill Graham became chairman of the hospital.

At the first meeting of the emergency board, it was decided that the immediate order of business was to hire a management team to run the hospital — but the cost was significant. There was a break in the meeting. Bill Graham, Gerry DeBlois and Tony Fisher went outside and agreed that each would pay a third of the cost of hiring the management team.

At the time Bill, whose family had been coming to the Vineyard since the 1970s, was living in Los Angeles. The emergency board met approximately twice a week throughout the next year. At the end of every meeting, Bill would hold a press briefing to bring the community up to date on what the board was doing.

Before the end of the year, it was decided that the hospital itself would file for bankruptcy — this time a Chapter 11 reorganization — due to the large amount of outstanding indebtedness, including millions owed to Blue Cross/Blue Shield. A special fund called The Island Trust for Medical Care was set up to accept charitable donations to pay for the cost of the hospital’s bankruptcy proceedings, and to meet other non-ordinary expenses caused by the crisis. Bill Graham, Tony Fisher and Gerry DeBlois were all significant contributors to the fund. As a result of these contributions, the hospital was able to operate without any interruption in services, while the expenses of the management team and legal proceedings involving Windemere and the hospital were funded with charitable dollars.

During the course of the bankruptcy proceedings, the hospital’s auditor determined that the hospital had actually slipped into bankruptcy years earlier — likely sometime in 1994.

In August of 1997, after a year of battling creditors, both the hospital and Windemere were discharged from bankruptcy. The balance sheets of both institutions had been cleaned up and the institutions were able to operate on a break-even basis. The bond indebtedness, and the claims by Blue Cross and numerous other creditors had been discharged through a one-time payment of $1.3 million — an amount that I believe was also funded by charitable dollars.

In September of 1997, Bill Graham stepped down from the emergency board of trustees, just a little over a year after he had begun his service.

“Is the emergency over? In a word, yes,” he told the Gazette at the time. “What we wanted to do was stabilize hospital operations, both financially and operationally — stabilize the debt and begin to recapitalize the [hospital] — The hospital is [now] breaking even, we have a competent and hard-working CEO, we have streamlined the management structure and installed effective financial systems.”

In the end he said that the future of the hospital rested where it should — with the Island community.

In an editorial, the Gazette took note:

“This moment marks the end of the emergency and the beginning of a complex campaign to rebuild the foundation of the hospital in ways that will ensure the security of an institution vital to the quality of Vineyard life . . . the changeover from emergency to further stabilization underscores the extraordinary service to the Vineyard community performed by the interim emergency board, under the strong and skilled leadership of chairman William Graham. Mr. Graham devoted endless hours commuting back and forth from his West Coast base to work with his colleagues to save this hospital. He deserves, as do all members of the emergency board, the gratitude, respect and appreciation from the entire community, year-round citizens and seasonal residents alike . . . This community is lucky to have people so willing to commit so much of their own time and money to help the Vineyard in moments of great crisis.”

The Martha’s Vineyard Hospital has had a series of crises throughout its existence. But in my view, this was its darkest hour, and at the time Bill Graham performed an extraordinary service. His contributions should not be forgotten.

Ronald H. Rappaport is an Edgartown attorney.