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Hospital Bankrupt: Court to Decide Who Gets What in Medical Center Sale

By John Mott Coffey, with News Mississippi affiliate WQNZ

NATCHEZ, Miss.–The Adams County Board of Supervisors on Monday barred the public from discussions about the bankrupt, county-owned  Natchez Regional Medical Center’s efforts pay its debts.

With NRMC’s pending sale to Community Health Systems, county and hospital officials are negotiating a payment plan with people and businesses wanting what’s owed them from the money Adams County gets from selling the hospital.

“The way the plan is determines priority, when the payments are going to be made, that sort of thing, out of the sale proceeds, the prepayment of taxes and that sort of thing,” county board attorney Scott Slover said after the hour-long meeting.

Adams County’s five supervisors have closed most of their meetings concerning NRMC since they decided in May 2013 to try selling the hospital.

State law allows government boards to kick the public out of meetings to discuss litigation.

The board’s meeting Monday was a prelude to a hearing Tuesday in U.S. Bankruptcy Court in Jackson to delve into NRMC’s financial conditions: how much money it owes, how much it has and how much is projected in the near future. Creditors are seeking more information about NRMC.

“I don’t think this hearing is going to jeopardize the sale,” Slover said. “It’s just about disclosure and fulfilling your fiduciary obligations.”

NRMC filed for bankruptcy in March as it struggles to generate enough revenues and pay more than $20 million in debts. CHS in July agreed with the Board of Supervisors to pay the county $10 million for Natchez Regional and another $8 million up front for local property taxes due to the county and city for the next 17 years.

Unsecured creditors are in the back of the line in the bankruptcy process for getting what’s owed them as NRMC must first repay $14 million to the Mississippi Development Bank for a bond loan it provided in 2006.

The rest of the money from the sale would be distributed through the bankruptcy court to the other creditors. They include hospital employees’ health insurance and retirement fund, which is owed $1 million, and food provider Valley Services, which is owed $527,000, according to bankruptcy court records filed in March.

“Basically, we’re trying to work with the unsecured creditors to get an agreed plan. They gave us some parameters and we think we can come up with a consensus,” Slover said.

The purchase of NRMC is contingent on being approved by U.S. Bankruptcy Judge Neil Olack and not being topped in a public auction Sept. 11 to give other potential bidders a chance to offer more for the hospital.

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