The Ft. Oglethorpe Hospital’s Board Decided This Is The Best For Hutcheson
On Wednesday November 19, the board of Hutcheson Medical Center decided to file for bankruptcy.
“The filing of Chapter 11 bankruptcy will allow the hospital to restructure its debt,” according to a news release from the hospital. “This will allow for Hutcheson Medical Center’s long term viability, and may help protect the hospital from Erlanger Health System’s recent efforts to foreclose on the hospital’s property.”
Erlanger Health System had loaned the, already struggling, Fort Oglethorpe hospital nearly $20.5 million. At a certain point, when realizing that Hutcheson would not meet their December 1st deadline of payment, Erlanger filed a civil lawsuit against the hospital. This puts Hutcheson Medical Center in potential threat of immediate foreclosure.
In their desire to hear public opinion about the future of their local hospital, Hutcheson Medical Center had established three separate days of meetings in the hospital that were open to the public. The day before the decision to file for bankruptcy was reached was the third and final day of these meetings. Several local residents and many hospital workers expressed their concerns in the case that Hutcheson would shut its doors.
Hospital Officials Cite Erlanger’s Poor Management As A Cause To The Downturn
In addition to lending money to the hospital, Erlanger Health System was contracted to manage the medical health care facility. Officials at Hutcheson have claimed that Erlanger has done a sub-mediocre job of running the institution, and therefore the hospital should not be held liable to pay back the loan.
Besides for the $20 million that is owed to Erlanger, there is an additional $40 million that is owed to other creditors.
Leaders of the hospital link the current financial issues to poor decisions made by board members in earlier years. Those bad choices are only now coming to haunt them.
Filing Chapter 11 is the Best Path for the Hospital to Take
“The plan to financially reorganize will allow the hospital to continue its primary mission of serving the healthcare needs of North Georgia residents,” said Farrell Hayes, President and CEO of Hutcheson Medical Center.
“We heard first hand from local residents at our three public hearings,” Hayes added, “that closing the hospital would be devastating to the public interest of the area’s citizens.”
“We hope that our filing for Chapter 11 reorganization will stop the Erlanger foreclosure, and give us a fresh start,” Hayes concluded. “This will allow us to continue taking care of the 160,000 residents in Walker, Dade, and Catoosa counties.”
In addition to the continued care of its patients, seeking bankruptcy protection will, “also allow the new hospital board and administration, to restructure the debt inherited from the old Board and compounded by the mismanagement, that is the subject of the hospital’s current counterclaim in the lawsuit initiated by Erlanger,” argued Corky Jewell, Chairman of the Board at Hutcheson Medical Center.
Jewell was quick to note that, “We fully expect Hutcheson to join that list of companies who have emerged from Chapter 11 reorganization even stronger than before.”