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Natchez Hospital Caught Up in Federal Lawsuit From Prior Administration

By John Mott Coffey, with News Mississippi affiliate WQNZ

NATCHEZ, Miss.–Adams County could get some money from a federal lawsuit alleging hospital administrators’ mismanagement of Natchez Regional Medical Center caused it to lose funds and go bankrupt last year. The county-owned hospital’s financial problems forced its sale to a corporate health-care chain.

While the county Board of Supervisors didn’t join the bankruptcy administrator in filing the suit last week, it has a stake in whatever money the case brings if the court agrees hospital administrators were negligent, said county board attorney Scott Slover.

Supervisors held a meeting closed to the public Monday to discuss the litigation. They will have input in the lawsuit, which is tied to the separate but related bankruptcy case Adams County officials are a part of.

NRMC filed for bankruptcy in 2014 when owned by the county as the board was seeking a buyer.

Bankruptcy trustee Kenneth Lefoldt is managing efforts to get money due to people and businesses who haven’t been paid for providing the former county hospital goods and services. This involves getting revenues the hospital generated prior to its sale to pay the debts.

The millions of dollars being sought also include $3 million the county supervisors borrowed last year to help facilitate the hospital sale, Slover said. Supervisors also want to recoup pension funds NRMC administrators failed to pay for hospital employees.

Community Health Systems of Tennessee acquired NRMC a year ago last Thursday and renamed it Merit Health Natchez.

The former NRMC administration was led by Bill Heburn, Donny Rentfro and Charles Mock with a seven-member hospital board.

The Adams County Board of Supervisors was the ultimate decision-maker for NRMC, but supervisors have stressed it was the hospital trustees they appointed and their administrators who ran it into bankruptcy in March 2014.

The hospital board was LeRoy White, Bill Ernst, Linda Godley, Lee Martin, Jennifer Russ, John Serafin and Lionel Stepter. Heburn and Rentfro were NRMC’s chief executive officers. Mock was chief financial officer. Walter Brown was the hospital’s attorney.

CHS also owns Natchez Community Hospital, which is now being consolidated with the former Natchez Regional. CHS has invested about $25 million into Merit Health Natchez. This includes about $12 million in major renovations at the former NRMC.

While the county continues to work through the hospital’s bankruptcy, supervisors have appointed Natchez attorney Jack Lazarus to represent the county’s interest as the bankruptcy court distributes funds to pay the hospital’s lingering debts. He sits on a three-man committee with a representative of the creditors and a representative of the bankruptcy trustee.

When it filed for bankruptcy, NRMC listed about $20 million in debts. This included about $15 million owed to the Mississippi Development Bank. It’s the first to be repaid.

The bankruptcy trustee’s lawsuit was filed in U.S. District Court in Jackson.

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