The players
Hutcheson Medical Center› Fort Oglethorpe Hospital, in bankruptcy since November 2014› Scheduled to close at 9 a.m. today.› About 320 full-time employeesErlanger Health System› Chattanooga hospital› Loaned Hutcheson $20 million in 2011.› If not paid back, Erlanger can foreclose on the hospital’s main campusCatoosa County, Ga.› Appoints board members to run Hutcheson.› Guaranteed half of Erlanger’s loan to Hutcheson, meaning the county has to pay Erlanger $10 million if Hutcheson doesn’t.Walker County, Ga.› Also appoints board members to run Hutcheson.› Also guaranteed half of the loan from Erlanger to Hutcheson in 2011.Regions Bank› Is owed about $33 million from Hutcheson, according to a December 2014 court filing.› If Hutcheson does not pay them back, Regions can foreclose on Hutcheson’s surgery center, located on Battlefield Parkway.
Hutcheson Medical Center will close at 9 this morning.
Nobody knows if it will ever open again.
Despite around-the-clock negotiations this week among multiple hospitals, two county governments and a bank, the parties with money tied into Hutcheson could not reach an agreement Thursday on a deal that would have kept the doors open. Hutcheson CEO Farrell Hayes believes that failure is the final blow to a community hospital that opened in 1953.
As he listened to lawyers argue about money and procedures for future court hearings, Hayes sat on a bench in the back of U.S. Bankruptcy Court, debating what he should tell employees.
"Sounds like we're going to shut down," he said. "I hope I'm wrong."
Earlier this week, attorneys for Walker County, Catoosa County, Regions Bank and Erlanger Health System debated a potential deal from Prime Healthcare Services, a California company interested in buying Hutcheson. The deal would have been worth $4.75 million.
Thursday morning, Walker County Attorney Don Oliver said he was optimistic that the last-minute deal would go through. But as he came into court, he said Regions Bank issued a new slew of demands - demands that Prime Healthcare would not agree to, killing the deal.
"For Regions to walk away from millions of dollars in their hand," Oliver said, "are you (kidding) me? What are they thinking? There's got to be something that we're not seeing. That's insanity."
A spokesman for Regions declined to comment Thursday night. But Oliver and Stuart James, another attorney representing Walker County, said Regions is negotiating with another company to take over what is currently Hutcheson's surgery center, located on Battlefield Parkway in Ringgold.
Oliver and James said Regions wanted Prime Healthcare representatives to promise they would not try to oppose Regions' sale of that land in the future. They said Prime Healthcare would not agree to that demand.
Catoosa County Attorney Clifton "Skip" Patty said Prime Healthcare refused to agree to a separate demand. He said an unnamed Regions suitor wants to perform oncology at the surgery center. He said Regions asked Prime Healthcare to promise not to perform oncology at Hutcheson, and Prime Healthcare's representatives would not oblige.
"I just can't believe (the deal) would blow up over that issue," Patty said. "Then again, I don't know what their business model is. I wouldn't think it would be oncology."
Asked about this in an email Thursday night, an attorney representing Prime Healthcare did not specifically address that issue.
But attorney Troy Schell wrote, "The hospital is on life support and we have done all we can. Hutcheson Medical Center is closing because Regions Bank believes it stands to make more money in a liquidation fire sale than working with Prime and others to keep it open. Their actions are shameful and will affect thousands of Georgia residents."
Some of the lawyers involved in the case said during Thursday's hearing they still think a deal can be reached, but they're rapidly running out of time. Because building codes change often, and because Hutcheson has been around for decades, Hutcheson would not pass current standards.
But hospitals are grandfathered in, meaning Hutcheson doesn't have to meet all of the modern codes. However, if the hospital's license runs out, Hayes said, anyone hoping to use that building as a hospital would have to pour millions of dollars into renovations. Hayes believes it would kill a deal.
Once Hutcheson closes today, the hospital's license will only be active for 10 more days.
Hayes thinks Thursday was the hospital's last chance. He is advising employees to pursue other job opportunities.
Staff Photo by Dan Henry / The Chattanooga Times Free Press- 10/21/15. Hutcheson Hospital and Medical Center in Fort Oglethorpe, Ga., on October 21, 2015.However, U.S. Bankruptcy Court Judge Paul Bonapfel set two hearings for next week: Tuesday at 2:30 p.m. and Dec. 11 at 4 p.m. If the parties involved can patch together some sort of deal at that point, they will go before the judge then.
"It's going to take a miracle to revive it at this point," Oliver said.
In addition to Regions, Oliver also blamed Erlanger for blocking this deal. He said Erlanger's representatives appeared interested in the deal, only to back away before Thursday's hearing. He also pointed out that Erlanger and Catoosa County are trying to block a $7.2 million sale of Hutcheson's nursing home.
"They're the enemy," Oliver said, "and I expect them to act like it."
For his part, Patty said Catoosa County doesn't necessarily oppose selling the nursing home. He just objects to this current sale, a complaint that is tied to Hutcheson's tangled structure.
The Hospital Authority technically owns Hutcheson. This is a board consisting of people appointed by the local governments. But the hospital also has a private company, Hutcheson Medical Center. Here, Hutcheson Medical Center is selling the nursing home. Patty believes the county will actually get a larger cut of the $7.2 million if the Hospital Authority makes the sale.
Nevertheless, Oliver was frustrated with Catoosa County's stance Thursday, and he admitted emotions ran high for him this week.
They did for Hayes, too.
Scott Lewis, a paramedic for Hutcheson, posted on Facebook on Wednesday night that Hayes and other hospital administrators are to blame for Hutcheson's financial problems because they did not take pay cuts. Hayes' wife then argued with Lewis about that issue.
Minutes later, Lewis said, Hayes added him as a friend on Facebook. Then, Hayes accused Lewis of beating women. He also challenged him to come to Hayes' office.
"You know where I am," the message read. "If you don't come see me, you're a (expletive)."
Before Thursday's hearing, Hayes said somebody had hacked his account. He said he didn't know someone was using his Facebook profile to challenge Lewis to a fight until the Times Free Press asked him about it earlier in the day.
"I was mortified," Hayes said.
Contact staff writer Tyler Jett at tjett@timesfreepress.com or at 423-757-6476.