Hutcheson workers told hospital will shut down Dec. 4

Hutcheson Hospital in Fort Oglethorpe, Ga is pictured in this file photo.
Hutcheson Hospital in Fort Oglethorpe, Ga is pictured in this file photo.

Hutcheson Medical Center will close Dec. 4, multiple hospital employees say.

The employees, speaking anonymously for fear of retribution, told the Times Free Press hospital administrators held a town hall meeting Thursday morning. The executives told the employees the hospital's last day of operations will be the first week of December.

On Wednesday, U.S. Bankruptcy Court Judge Paul Bonapfel also signed an order authorizing the hospital to begin shutting down.

Hutcheson CEO Farrell Hayes declined to comment Thursday when asked to confirm the shutdown date. He referred the Times Free Press to Ronald Glass, the court-appointed trustee charged with handling the hospital's finances. Glass, too, declined to comment.

However, on Oct. 30, Glass told a U.S. Bankruptcy Court judge that he would begin the process of shutting down the hospital this week. Glass had to give the Georgia Department of Health and Human Services a 30-day notice.

"I recognize that this was not going to work and didn't want to put anyone at risk," Glass told the Times Free Press after last week's court hearing.

Kevin Hopkins, Hutcheson's vice president of operations, sent an email to the staff after the court hearing, saying the hospital was not necessarily going to close. He said the hospital could remain open if a buyer stepped in.

photo Hutcheson Hospital in Fort Oglethorpe, Ga is pictured in this file photo.

Don Oliver, attorney for Walker County as well as the hospital's governing body, said Hutcheson received an offer for all of its properties for $13 million. He said the deal fell through because it was opposed by representatives for Regions Bank, which is owed more than $30 million by Hutcheson and has the right to foreclose on the hospital's cancer center on Battlefield Parkway.

A lawyer for Regions said the bank was still participating in negotiations for the purchase of the hospital.

Hutcheson received a second offer from California firm Prime to buy the complex for $14.2 million, Oliver said, but representatives from Regions and the unsecured creditors committee did not support that offer either.

Hutcheson filed for Chapter 11 bankruptcy a year ago, when it owed about $80 million. That includes the Regions debt and another $30 million to Erlanger Health System, which loaned Hutcheson money in 2011 as part of a management agreement.

When the partnership between Erlanger and Hutcheson ended in mid-2013, Erlanger filed a motion in U.S. District Court. The hospital hoped to foreclose on Hutcheson's main campus and the Parkside Nursing Home, where about 100 people live. Hutcheson's bankruptcy last year derailed those plans.

Hutcheson is on the verge of selling its nursing home, which would allow the residents to remain where they are. Maybrook Healthcare LLC, from New York, has offered to buy the nursing home for $7.2 million.

The purchase will not be final until an auction is held for the nursing home. On Monday, the bankruptcy judge approved the details of that auction, which will be held in Atlanta on Dec. 3.

Maybrook will serve as the stalking horse bid, meaning that another company would have to bid about $315,000 more than Maybrook's current offer. After that, any other companies can up the offer in increments of $50,000.

The hospital also will auction off its other properties on that day, assuming the bid is strong enough to please leaders for Hutcheson, Regions and other groups involved in the case. So far, no agreements have been filed in court for stalking horse bidders other than Maybrook's pursuit of the nursing home.

If Hutcheson sells any of its properties, the bankruptcy judge will have to approve the sale during a hearing in Atlanta on Dec. 14.

Contact staff writer Tyler Jett at tjett@times or at 423-757-6476.

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