RINGGOLD, Ga. - Hours before a permanent shutdown, Hutcheson Medical Center leaders believe the hospital has been saved.
Attorneys from multiple hospitals and county governments will gather in U.S. Bankruptcy Court in Atlanta today at 4 p.m. for a hearing on a potential deal from Prime Healthcare Services, a California-based company that says it specializes in turning around financially troubled community hospitals.
Hutcheson CEO Farrell Hayes said Prime Healthcare would take over the hospital's main campus in Fort Oglethorpe. The deal needs to happen quickly because the hospital is currently scheduled to close Friday morning. If the hospital closes, Hayes said it won't reopen and the deal from Prime Healthcare will disappear because the hospital's building is not up to current codes.
"There is a deal that has been struck," Hayes said.
If Judge Paul Bonapfel approves the deal, representatives from Prime Healthcare will take over Friday, keeping the hospital's doors open, multiple sources close to the negotiation said. This would likely save hundreds of employees' jobs. Last week, Hayes said, the hospital still employed about 500 people, though they began to get laid off in waves, as recently as the beginning of this week.
The sources speaking to the Times Free Press requested anonymity because the details of the negotiation are still being hammered out, and they didn't want to upset other parties who have come to the table.
But Stuart James, an attorney representing Walker County, said, "I think the court is going to be approving the sale of the hospital."
(From left) Kim Plant, Hutcheson Director of Physician Practice Operations, Tiffany Richards, Hutcheson Medical Staff Coordinator, Michelle Chandler, Hutcheson Occupational Health, and Jennifer Frazier, Hutcheson Director of Case Management, sit before Catoosa County Manager Jim Walker in Fort Oglethorpe, Ga. on Wednesday, Dec. 2, 2015.However, Catoosa County attorney Chad Young said Wednesday night the deal isn't as close to a slam-dunk as Hayes and James indicate. Young said county representatives have not seen a written offer from Prime Healthcare and don't know whether they will approve of it.
On Wednesday afternoon, Young said, attorneys from Catoosa County, Erlanger Health System and the bankruptcy trustee overseeing Hutcheson's finances discussed a potential deal with Prime Healthcare. Young said those negotiations will continue today.
"There are many moving parts to the discussions so we have not reached an agreement," Young wrote.
Pat Charles, a spokeswoman for Erlanger Health System, declined to comment on whether the Chattanooga hospital will agree to a deal with Prime Healthcare.
"Nothing has changed with regards to Erlanger's position on Hutcheson," Charles wrote in an email. "We loaned Hutcheson $20 million and our intention is to recover that money on behalf of our institution."
Though the details of a contract with Prime Healthcare are still uncertain, the company floated an offer last week. At the time, Prime Healthcare had proposed buying all of Hutcheson's property except for its nursing home for a total of $7.2 million. The company also said it would invest $20 million to upgrade the buildings and $1 million to recruit more physicians.
However, that deal did not go through, in part, because Regions Bank opposed it. Hutcheson owes the bank about $33 million, according to a December 2014 court filing. If Hutcheson cannot pay the bank back, Regions has the option to foreclose on the hospital's ambulatory surgery center located on Battlefield Parkway.
Because Regions did not go along with Prime Healthcare's offer, the company has now proposed this new offer, which Hayes said does not include the Battlefield Parkway property.
Of those still at the negotiating table, each party has its own angle.
Catoosa and Walker counties each are facing $10 million payments to Erlanger because the Chattanooga hospital loaned Hutcheson money in 2011 as part of a management agreement. While Walker County's leaders have been pushing for this deal with Prime Healthcare, Catoosa County's leaders publicly have been more hesitant.
Erlanger, meanwhile, said that $20 million debt has grown to $32 million because of the interest on the loan. If Hutcheson does not pay Erlanger back, Erlanger has the option to foreclose on Hutcheson's main campus - the property that Prime Healthcare is now trying to buy.
On Wednesday afternoon, a group of about 20 Hutcheson employees gathered inside Catoosa County's administrative building to voice concerns about the county's hesitance to take the deal with Prime Healthcare.
They came because Hayes asked an employee to post a message on a Hutcheson Facebook page.
"We are all desperately working with Walker County's effort to close the deal," the post read, "but Catoosa has gone silent."
To the employees' chagrin, they found that the Catoosa County commissioners were not at the Wednesday afternoon meeting. Instead, a member of the Northwest Georgia Regional Commission was explaining the basics of a plan for the county to grow. He was discussing where residential neighborhoods might be built in the future, and where county leaders can expect economic development.
After that presentation, Catoosa County Manager Jim Walker tried to talk with those gathered about the hospital. However, Walker told the group he has only been on the job for seven weeks and does not understand the ins and outs of the hospital.
"By not sending someone who can actually answer a few questions," one protester told Walker, "if I were you, I'd quit my job. They're sending you into the lions' den."
Said another protester: "Why is Catoosa County the one who thinks they have found some problem with (Prime Healthcare's offer)?"
Contact staff writer Tyler Jett at tjett@times freepress.com or at 423-757-6476.