Walker County Commissioner Shannon Whitfield announced Wednesday that he will hold a special called meeting tonight to settle the county’s lawsuits with Erlanger Health System.
The hospital has sued the county twice since December 2015, demanding repayment for a loan tied to the now-closed Hutcheson Medical Center. Walker County owes $8.7 million, plus interest.
Whitfield told the Times Free Press last week that settling the debt with Erlanger was his first priority for 2018. In a press release Wednesday, county spokesman Joe Legge announced that Whitfield will hold a meeting at 6:30 p.m. in the commissioner’s office, located at 101 S. Duke St. in LaFayette, Ga.
The meeting’s purpose will be to consider an agreement with Erlanger to settle the pending lawsuits.
The disputes between the county and the Chattanooga hospital began in the first months of 2011, when Erlanger was negotiating an agreement to manage Hutcheson Medical Center. As part of that deal, Erlanger agreed to loan Hutcheson $20 million. Catoosa County’s commissioners agreed to back half the loan, and former Walker County Commissioner Bebe Heiskell agreed to back the other half.
Kevin SpiegelIn 2013, Hutcheson’s board voted to kill the agreement with Erlanger. The board for Erlanger, in turn, demanded its money back. Hutcheson then filed for Chapter 11 bankruptcy protection, protecting it from having to pay back the debt.
In December 2015, a bankruptcy trustee closed Hutcheson, saying it no longer had enough money to stay open and remain safe for patients. Weeks later, a private company bought the hospital, and Erlanger received some of the money.
As part of an agreement, this lowered the counties’ debts to Erlanger from $10 million to $8.7 million.
Erlanger then sued Walker County, demanding its money. At the same time, Erlanger negotiated a settlement with Catoosa County, allowing it to pay $6.2 million.
As a condition of that deal, Erlanger officials promised the Catoosa County commission that the hospital would not offer a bigger discount to Walker County.
In August 2016, a federal judge granted summary judgment to Erlanger in its case against Walker County, telling the county to pay the hospital without any trial on the lawsuit. Heiskell appealed the ruling. Three months later, Whitfield unseated her in the commissioner’s election.
In July, the U.S. Court of Appeals affirmed the earlier ruling, meaning Walker County was still on the hook for the money. A month later, Erlanger CEO Kevin Spiegel offered Whitfield some settlement options.
Total payments ranged from $8.7 million to $9.4 million, with the cheapest deal requiring the quickest payment. The length of the deals ranged from three years to seven years.
Whitfield rejected the offers. He said the county couldn’t pay $8.7 million in three years. He said the other two deals were illegal because they lasted beyond his term.
Instead, he created a plan to pay back the hospital $7.5 million over three years. Erlanger filed another lawsuit in U.S. District Court, reminding the county that the contract Heiskell signed gave the hospital the ability to force the county to raise property taxes to pay back the debt.
In the press release Wednesday, Legge said Whitfield would not be available for comment until after Thursday’s meeting. Spokespeople for Erlanger did not immediately return a call or email asking about this agreement.
Contact staff writer Tyler Jett at 423-757-6476 or tjett@timesfreepress.com. Follow him on Twitter @LetsJett.