Hutcheson Medical Center in Fort Oglethorpe, Ga.Hutcheson Medical Center will be auctioned in August to the highest bidder if Erlanger Health System has its way.
In the latest battle between the two publicly owned hospitals over some $22 million, Chattanooga-based Erlanger announced Thursday that it has initiated formal foreclosure proceedings against Fort Oglethorpe-based Hutcheson.
Erlanger lent the $22 million to Hutcheson, with the hospital property as collateral, as part of a two-year management agreement that began with fanfare in April 2011 and ended in August of last year in what was described as an amiable parting. Walker and Catoosa counties further secured the loan with guarantees of up to $10 million per county.
The acrimony surfaced later, when Erlanger sued early this year in federal court to get the money back. Hutcheson, represented by the law office of former Georgia Gov. Roy Barnes, responded that it didn’t owe Erlanger anything — and, in fact, was due millions in damages because of Erlanger’s alleged mismanagement.
“We have acted in good faith with regards to Hutcheson, but the time has come to expect repayment,” Erlanger board Chairman Donnie Hutcherson said in a news release Thursday.