Community News Hutcheson authority board could be on the hook

Community News Hutcheson authority board could be on the hook

August 3rd, 2016 by Tyler Jett in Community Walker

Hutcheson Medical Center continues to be at the center of legal arguments.

Photo by Doug Strickland /Times Free Press.

The Hospital Authority of Catoosa, Dade and Walker counties voted last Wednesday night to declare its May 2 gathering was not properly announced.

And because it was not properly announced, everything they did during that meeting no longer holds weight.

During that May 2 meeting, four of five attending board members voted to let Dr. Darrell Weldon "execute" a settlement with Erlanger. Weldon, the board's chairman, also asked Walker County to pay Erlanger about $8.5 million as part of that settlement.

Now, however, the majority of the board members are saying the meeting was called illegally. Tom Weldon, the chairman's son, called the meeting in the form of an email. According to the board's bylaws, one must call such meetings in writing at least three days in advance.

If the meeting is void, the board figures, then the settlement with Erlanger is void. For his part, Erlanger lawyer Jeff Woodard has said the agreement Erlanger already signed with Hutcheson is a done deal. Hutcheson's latest vote doesn't matter to Erlanger.

Hospital authority board members Bill Cooke, Steve Cooper, John Culpepper, Steve Ellis and Corky Jewell voted to declare the May 2 meeting improper. Four of those five members are from Walker County. Bill Cohen, of Catoosa County, and Robert Goff, of Dade County, voted against the change.

Cohen said meetings have been called by email for years.

"It was not unusual for these to be called by email," he said.

"Yes we have had notifications via email," Cooper later responded. "That doesn't mean the process was correct."

For the board, the next step will be to sit back and watch a fight between Walker County lawyers and Erlanger lawyers.

In 2011, Erlanger loaned Hutcheson $20 million. At the same time, Walker County Commissioner Bebe Heiskell signed a contract with Hutcheson's board, promising to pay about half of that loan with taxpayer funds if Hutcheson didn't have the money.

Another company bought Hutcheson in May, after the hospital filed for bankruptcy. Around the same time, U.S. District Court Judge Harold Murphy ruled that Hutcheson owes Erlanger about $36 million — for the $20 million loan, plus interest and late fees.

Because Hutcheson no longer exists, Erlanger officials can pursue a couple of options.

One, they can sue Hutcheson's individual board members, hoping to recoup some of the $36 million. Or two, they can get the money from Walker County. (Catoosa County, which also signed that contract in 2011, has already settled with Erlanger for $6.2 million.)

When Hutcheson's board voted May 2 to settle with Erlanger, this helped open the path for Erlanger to get its money from Walker County.

Now, Erlanger may have to turn toward the individual board members, though it will first argue the settlement they already reached still works.

During last Wednesday's meeting, the board also voted to amend meeting minutes from its executive session on May 2, making those minutes an open record. Behind closed doors, according to the minutes, Hutcheson attorney Tom Weldon told the board he would talk to Erlanger's lawyer about terms in the settlement that members want to modify. Tom Weldon is the board chairman's son.

Jewell said the board should know specifically what is in the agreement before the chairman executes the agreement. In open session, however, these specific points were not mentioned — only that Tom Weldon would put the discussed agreement in writing, and that Darrell Weldon would execute it.

Also during executive session, Culpepper and Jewell both said they wanted to consult with Heiskell before deciding whether to make Walker County pay Erlanger.

"Culpepper said the Board did tell Ms. Heiskell that we wouldn't throw her under the bus," the minutes read. "He said he thinks we should find out what her game plan is."

At the end of last Wednesday's meeting, Weldon said the board should not come together again until Erlanger and Walker County have sorted through their own issues. Erlanger has sued Walker County, demanding about $8.5 million because of that 2011 arrangement.

Walker County, meanwhile, has fought back, claiming Erlanger intentionally caused Hutcheson's demise. Murphy has ruled several times against this argument.

"I don't think this forum of Hospital Authority meetings is a place where we're going to reach a resolution," Weldon said, before the board adjourned.