St. Vincent Catholic Medical Centers is set to emerge from bankruptcy more than two years after filing for Chapter 11 protection, after a court confirmed its reorganization plan.

Hospital officials said the plan was approved Friday, paving the way for the corporation to come out of bankruptcy by Labor Day. “Chapter 11 is a daunting process to go through … and this has been a long process,” St. Vincent’s chief restructuring officer, Martin McGahan, said.

St. Vincent’s, a hospital operator anchored by its flagship facility in Greenwich Village, will emerge from bankruptcy with $270 million in term debt and $50 million in revolving credit facility to be financed by GE Healthcare Financial Services.

Calling the plan’s confirmation a “great achievement,” Mr. McGahan said, “We’re now a much stronger financial institution on a go-forward basis.”

By the time the hospital emerges from bankruptcy protection, for which it filed in July 2005, it will have paid more than $14 million in legal fees to dig itself out. “There’s no disputing that bankruptcy and its associated professionals cost the institution money, but that is part of the process,” Mr. McGahan said.

Part of that process, he said, included financial restructuring accomplished in part by divesting of three facilities and renegotiating managed care and other service contracts.

He said a plan to sell St. Vincent’s flagship building in Greenwich Village was not tied to the restructuring. “Coming out of bankruptcy doesn’t have so much to do with the future and what the vision for St. Vincent’s is going to be,” he said.

Earlier this month, the hospital announced a partnership with Rudin Development to create a new, “green” facility to replace St. Vincent’s Manhattan, which is currently situated on the east side of Seventh Avenue between 11th and 12th streets. Plans call for tearing down the O’Toole building, on the west side of the street, and rebuilding a new hospital there. The old site would be redeveloped as residential property.

Both parties declined to speculate on the building’s sale price pending approval from the city’s Department of City Planning, although it could yield more than $116 million, insiders have speculated.

Yesterday, Rudin’s chief operating officer, John Gilbert, praised the hospital for having a “great week last week.”

“They are emerging from bankruptcy, and coming out of that cloud is a very positive thing for the hospital,” he said.

However, opposition to the plan at a community forum last month could signal future challenges to redevelopment plans in the area. “Most people in the neighborhood feel very strongly that we want St. Vincent’s to continue to operate and modernize,” the executive director of the Greenwich Village Society for Historic Preservation, Andrew Berman, said. “Under the current plan they would sort of pack all of the new hospital facilities onto one site, which we’re concerned would create this one very, very large and very, very dense structure.”