Hutcheson closing Friday; lawyers still trying to broker deal to save hospital

Hutcheson Medical Center is seen in Fort Oglethorpe, Ga.
Hutcheson Medical Center is seen in Fort Oglethorpe, Ga.
photo Hutcheson Medical Center is seen in Fort Oglethorpe, Ga.

Hutcheson Medical Center will close at 9 a.m. Friday, though a room full of lawyers are still hoping to come to a solution that will save the hospital.

Hayden Kepner, an attorney representing Hutcheson, announced in U.S. Bankruptcy court this afternoon that the parties involved in the case could not agree on terms of a sale to Prime Healthcare Services, a California company offering to take over Hutcheson for $4.75 million.

Also read

* Could this last-minute deal save Hutcheson Medical Center? * Hutcheson employees beg for last-minute deal * Judge: Hutcheson Medical Center must start layoffs this week * Hutcheson fights to keep doors open in face of looming layoffs * Hutcheson Medical Center ordered to begin laying off employees immediately * As shutdown looms, Hutcheson prays for salvation * Company offers to buy Hutcheson Medical Center for $7 million, hospital leaders say * Hutcheson workers told hospital will shut down Dec. 4 * Hutcheson clinic closings spark backlog of patient records requests * Mass layoffs, services cut at Hutcheson Medical Center * Hutcheson Medical Center patients at risk?

With the hospital scheduled to close Friday, CEO Farrell Hayes said last week that he thought the deal with Prime Healthcare had to go through before Hutcheson closed. The building is not up to code, and Hayes said state officials would not allow it to re-open.

However, Kepner said this afternoon that they have a slightly larger timeframe to negotiate a deal. Hutcheson can keep its hospital license for 10 days after it closed. And if Hutcheson still has its license, the building code issue would not come up if Prime Healthcare bought the hospital.

This gives all sides in this tangled case about 1-1/2 weeks to nail down a deal. U.S. Bankruptcy Court Judge Paul Bonapfel told all the lawyers to come back to his courtroom Tuesday -- perhaps with a final deal.

There are three key issues holding up the deal.

First, Erlanger Health System has to finalize a settlement that would lay out how much of Prime's offer goes to Erlanger. Lawyers from some of the other companies tied into this case will have to also agree on this deal.

Erlanger's share of the money from Prime is important because Erlanger is legally allowed to foreclose on that property. Why? Because Erlanger loaned Hutcheson $20 million in 2011 -- money that Hutcheson hasn't paid back.

Second, leaders for Catoosa and Walker counties have to agree to the terms of this deal. This is in part because those governments -- on behalf of their taxpayers -- agreed to give Erlanger that $20 million if Hutcheson never did.

The counties appear to be on the hook for that money. Walker County attorney Don Oliver said Commissioner Bebe Heiskell approved of the deal on the table, which hasn't been made public yet.

Catoosa County attorney Clifton "Skip" Patty said he doesn't know how his government's elected officials feel yet. The Catoosa County commissioners will hold a special called meeting on Monday to vote on the proposed deal.

The third issue to be worked out stand between Prime Healthcare and Regions Bank. The bank is owed about $33 million, according to a December 2014 court filing.
If Hutcheson can't pay Regions back, Regions can take Hutcheson's surgery center, which is located on Battlefield Parkway.

Upcoming Events