Judge halts foreclosure against Hutcheson hospital

Judge halts foreclosure against Hutcheson hospital

August 1st, 2014 by Dave Flessner in Local - Breaking News

Hutcheson Medical Center

Photo by Doug Strickland/Times Free Press.

A federal judge in Rome, Ga., today halted a planned foreclosure against Hutcheson Medical Center set for next Tuesday.

U.S. District Court Judge Harold L. Murphy granted a temporary restraining order sought by Hutcheson and its senior lender, Regions Bank, to block a planned sale of Hutcheson assets next week. Murphy said keeping the hospital open was in the public interest and he said overcoming an auction sale could be "insurmountable." The judge also ruled that Regions, which also fought the planned foreclosure, had a senior claim on Hutcheson's debts over Erlanger.

"This is a great victory for us and the people of Catoosa, Walker and Dade counties who count on Hutcheson for their hospital care," Hutcheson President and CEO Farrell Hayes said today after the judge halted the planned foreclosure. "We serve 85,000 patients annually and employ 850 local citizens and we are very pleased that the mission of this hospital will continue."

Erlanger planned to try to sell Hutcheson assets next Tuesday morning at the courthouse steps to try to recover $20 million that Erlanger lent to Hutcheson three years ago when Erlanger stepped in to help run and revive the Fort Oglethorpe hospital.

Hayes said the hospital, although still heavily in debt, is now showing an operating profit and is improving its performance. Inpatient volume at Hutcheson increased 30 percent over the past three months and oncology volume has doubled under the direction of the hospital's new management team, Hayes said.

"I think it is important to note that these dramatic gains occurred after the management agreement with Erlanger was terminated," he said.

Former Georgia Gov. Roy Barnes, the lead legal counsel for Hutcheson, said the judge was very aware of the negative impact that would occur with a foreclosure.

"I am very pleased that the judge understands the importance of this hospital and the tremendous damage to the community served by HMC that would occur with a foreclosure," he said.

Read more in tomorrow's Times Free Press.