A settlement was reached at the bankruptcy hearing in Nashville, Tenn., in the courtroom of Judge Charles M. Walker Thursday that will allow the Coahoma County Board of Supervisors to take the next step and find a buyer for Northwest Mississippi Regional Medical Center.
Curae Health Inc. from Clinton, Tenn., was running the hospital when it declared bankruptcy in the fall 2018. Community Health Systems from Franklin, Tenn., previously ran the hospital, but remained on the lease after Curae took over. In the event of a bankruptcy, the lease obligated CHS to once again run the hospital.
As part of a settlement, CHS agreed to take over running the hospital in November 2018. The Coahoma County Board of Supervisors were given approximately one year from that time to find a buyer for the hospital. However, there was still a disagreement to be worked out.
When CHS took over the hospital, part of the deal was it would purchase the supplies and equipment in the facility from ServisFirst Bank, which financed Curae. A settlement was reached in court for CHS to pay ServisFirst $1,250,000 for everything.
All of the paperwork is expected to be signed in the near future.
Board of Supervisors President Paul Pearson from District 1, Vice President Johnny Newson from District 4, and Supervisor Derrell Washington from District 3 along with County Attorney Tom Ross arrived in Nashville Wednesday night. Bankruptcy attorney Erika Barnes from Nashville represented the Supervisors.
Pearson said, at first CHS wanted to pay around $500,000 for everything, while ServisFirst was looking to charge $10 million.
The deal between both sides was finalized Wednesday night.
“On the way over, Tom was telling me that a lot of times these negotiations go on before,” Pearson said. “They try to have everything worked out when 10 o’clock comes around. CHS had a price in their mind they thought they should pay for the supplies and equipment that’s in the hospital.”
Pearson credited Ross for putting the County in a position to be able to have CHS running the hospital.
“Tom Ross, our attorney, made sure that CHS was still on the lease as far as being responsible in case Curae didn’t make it work, just like what happened,” he said.
Pearson also said CHS representatives did not ask for a penny to fly to Nashville. He added CHS was a big enough company to the point where it could have walked away, in spite of the lease.
“They probably could have walked away anyway and said, ‘We’ll see you in court,’ but they didn’t,” he said.
Newson said attorneys for hospitals in Batesville, Amory and other areas were at the hearing and CHS could have been on the hook for a combined $60 million.
“When we got there, there was really not much for us to do per se,” he said. “Our attorney (Barnes) was there. She represented us very well, so therefore, she got up and made her point in reference to Coahoma County and she spoke to the judge and let him know there were several supervisors there in support of the bankruptcy case hoping it would be resolved today.”
Newson said District 2 Supervisor Pat Davis and District 5 Supervisor Will Young were dealing with business in Coahoma County.
“We kept them abreast of every step we had, every meeting or whatever,” Newson said. “They took care of the home front.”
Washington was also pleased with the settlement.
“I feel pretty good,” he said. “I think it was a great day, a great thing for the citizens of Coahoma County and surrounding areas.”
The Board of Supervisors has not been able to focus on finding a buyer for the hospital thanks to the issues between CHS and ServisFirst.
“Once this is settled and once CHS takes complete ownership of everything out there to the point where Coahoma County only has to deal with CHS and there’s nobody else involved, we’re going to have to go to work and start getting things taken care of at the hospital and having something that could be marketed,” Pearson said. “Or we’ve got to make up our minds are we going to, the County itself, take it back over and hire somebody to manage it? We’ve just got to get busy and make sure.”
He said the Supervisors will have to sit down at a board meeting with CHS and iron out expectations.
The good news, according to Pearson, is CHS has been showing a profit every month since it started running the hospital again.
“It’s been tough,” he said. “It’s been hard. It’s been tough on everybody. We’ve got some stuff out there we’ve got to do. We’re going to spend some money on the hospital for some equipment.”
Pearson specifically said the hospital roof is leaking.
Newson also said the Supervisors will have to discuss selling or re-leasing the hospital.
“To be honest with you, it looks like we’re about five months behind the sale with the hospital,” he said. “We’re hoping we can add five months as of today to the end of the process with the bankruptcy case, which would give us another five months.
“We would love to have a full year, but we may not need it. With the grace of God, we may not need it.”
The County passed a resolution in 2018 stating it would take over the hospital if a buyer is not found in time, but Newson hopes things play out differently.
“My preference would be to get another entity to take it over for the simple reason we want someone that’s proficient in running a hospital, someone that has experience and has done it before and also someone that has deep pockets and can take it,” he said. “Also, when you’re talking about running a hospital, you want to focus on not only the facility, you want to focus on the employees, you want to focus on bringing in new specialists. All of that comes into play when you’re running a hospital.”
Washington said the next step in the process would be discussed at a board meeting.
“We’ll just wait and just talk about it at our board meeting and, hopefully, we’ll get somebody to come in and buy the hospital,” he said.
