For Sale: Bankrupt Hospitals in America’s Heartland
(Bloomberg) -- Bankrupt hospital group Americore Holdings LLC was in a precarious spot before the coronavirus ripped through America’s heartland. Now, thanks in part to federal aid, it’s looking for buyers.
The group is seeking bids on St. Alexius Hospital in St. Louis, Ellwood City Medical Center near Pittsburgh and Izard County Medical Center in Arkansas, according to bankruptcy court papers. With the U.S. economy at a virtual standstill since the pandemic spread, it’s a tough time to sell anything, let alone a hospital. But the Americore facilities are drawing some interest -- six potential buyers had signed non-disclosure agreements as of April 21, the papers show.
Americore filed for bankruptcy late last year amid a feud with lenders and a federal investigation into billing practices at one of the hospitals. The coronavirus pandemic, the company’s poor record keeping and limited access to cash have complicated efforts to stabilize operations, but CARES Act funds hit Americore’s books this month and proved a “breakthrough” for the hospitals, an attorney for court-appointed Trustee Carol Fox said in a hearing last week.
St. Alexius Hospital received about $834,000 of aid, Izard County Medical Center some $250,000 and Ellwood City Medical Center about $1.8 million, said Jimmy Parrish of Baker & Hostetler LLC, who represents Fox. The funds relieved Americore’s cash woes and will allow the Lauderdale By the Sea, Florida-based company to focus on selling the facilities, he said at the hearing.
The situation demonstrates the high-wire act facing health-care providers across the U.S., many of which were in dire financial straits even before the pandemic simultaneously boosted demand for their services and began squeezing their finances. More than 30 hospitals entered bankruptcy last year, and banks are now seeing a wave of funding requests from distressed hospitals.
Izard County Medical Center, the roughly 25-bed hospital in rural Arkansas up for sale, has failed to pay more than $300,000 of rent, according to court papers filed by its landlord. The property owner will hold off on seizing the building while Americore looks for buyers, an attorney for the landlord said in the hearing last week.
Ellwood City Medical Center -- which closed last year on the order of a state health department and was raided by the Federal Bureau of Investigation -- has been approved as an alternative care site for Pennsylvania’s Covid-19 response, Parrish said.
Parrish didn’t immediately respond to a message seeking comment on the sale process. Fox didn’t immediately provide a comment.
The bankruptcy case is Americore Holdings LLC, 19-61608-grs, United States Bankruptcy Court for the Eastern District of Kentucky (London).
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