CLEVELAND, Tenn. – A neutral third party should settle the ongoing dispute between Bradley County and United Way of Bradley County, according to a petition filed Tuesday in Chancery Court.
The issue centers on how proceeds from the sale of Bradley Memorial Hospital should be distributed.
The petition filed by County Attorney Joe Byrd is the latest in a dispute going back to the 2005 sale of the county-owned hospital and how portions of the $76.5 million paid by Community Health Systems of Franklin, Tenn., should be distributed.
A 2006 Chancery Court decree said $15 million goes to Bradley County and $19 million goes to United Way of Bradley County. Both use income from the invested money to offer grants for community projects and programs relating to health, wellness and quality of life.
The dispute concerns other funds and which party should get them now that the former hospital’s financial obligations have been settled.
In August, Bradley County filed a Chancery Court petition seeking a declaratory judgment for the disputed funds. United Way answered that petition with one of its own, filed by attorney Marcia McMurray. According to United Way’s petition, Bradley County did not own or operate Bradley County Memorial Hospital.
Instead, United Way says, the hospital was created by a private legislative act and operated through an independent board of trustees. Entrusted with another $5 million by the court, the trustees created the Bradley Memorial Fund, now administered by United Way.
In recent months, still other funds have appeared, including payment from the hospital’s insuror when the Virginia insurance group went bankrupt. Also disputed are the hospital’s share of a Cook County, Ill., class action lawsuit settlement, and more.
Both the Bradley County and the United Way petitions are before Chancellor Jeri Bryant.
In his petition, Byrd says the situation needs a clear set of eyes to determine the outcome.
“For the public trust and in light of the fact that no final audit was completed of the proceeds from the sale of the hospital, Bradley County avers that an accounting needs to be completed by a neutral third-party professional selected by the court,” his petition reads.
That accounting, according to Byrd’s petition, should include what happened to the $56.5 million not acquired by the county in the original court order, including money paid to creditors and entrusted to United Way.
The county also is asking for an accounting of all funds Bradley County received and invested and funds received by United Way and its investment records. The county also asks the court for subpoena powers to get the records.
The county also is asking that the cost of the accounting be shared by the county and United Way but not paid from the monies in question. Both sides agree, too, that the Tennessee attorney general should review how the funds were, or should be, dispersed.
The county says any hospital money from before the sale closing or during the winding down of hospital business should go to the county’s fund. In previous court filings, the county says the County Commission reached an agreement with hospital trustees.
“It is clear that the agreement contemplated only the proceeds from the sale of the hospital after winding up the corporation,” according to the county.
But United Way disagrees, and says the county is only entitled to $15 million.
“Rather, it is clear that the agreement contemplated that Bradley County was to receive only $15 million, plus interest earned on that amount, and that all other funds were to be transferred to United Way by the hospital trustees,” summed up the United Way petition.