Erlanger Files Notice To Foreclose On Hutcheson Medical Center Property, Recoup $20+Million; Hutcheson Calls Move "Shameful"

Thursday, July 3, 2014

Officials with the Erlanger Health System have initiated formal foreclosure proceedings against Hutcheson Medical Center "as part of the effort to recoup moneys owed to Erlanger pursuant to the management agreement signed three years ago between the two healthcare providers."

Farrell Hayes, president and CEO of Hutcheson Medical Center, responded, “In negotiating a settlement over the management contract, Hutcheson made an offer that would have allowed for full repayment of the $20 million loan to Erlanger. It is shameful that Erlanger, which just posted a huge profit this week, would refuse that offer and instead seek to close a small community hospital.”

Hutcheson board members received notification of Erlanger’s intentions to foreclose on Hutcheson property on Thursday, along with a copy of public Notice of Sale submitted to Catoosa and Walker County legal publications. The sale under the security deed is scheduled for the first Tuesday in August on the steps of the Catoosa County Courthouse in Ringgold.

Under the terms of the management agreement, signed April 25, 2011, Erlanger agreed to provide management services to Hutcheson and, in addition thereto, issued a line of credit for $20 million in an effort to save the failing facility, officials said.  

Erlanger’s $20 million line of credit was secured by the real property and improvements on Hutcheson’s main campus in Fort Oglethorpe and further guaranteed by Walker and Catoosa Counties, up to $10 million per county, it was stated. At the time Erlanger signed this agreement, Hutcheson was losing $1.5 million a month.

Erlanger officials said, "In May 2013 Erlanger loaned Hutcheson an additional $550,000 to further assist the hospital in meeting payroll obligations.  In November of 2013, Hutcheson terminated the management agreement with Erlanger.  Since that time Erlanger has attempted on numerous occasions to come to a mutual agreement as to an effective termination and timely repayment of all moneys owed by Hutcheson to Erlanger.  Erlanger is willing to continue to have further dialogue with Hutcheson to resolve this issue in an amicable manner."   

“Erlanger dedicated well over $20 million and other invaluable resources to Hutcheson to ensure it would continue to meet the healthcare needs of the northwest Georgia community,” said Erlanger President and CEO Kevin M. Spiegel, FACHE.  “Without exception, Erlanger met its obligations to Hutcheson under the management agreement.”

Erlanger officials said, "Despite Hutcheson’s repeated threats to terminate the agreement, Erlanger continued to work with Hutcheson in exploring the feasibility of continuing its relationship through a long-term lease agreement, including a submission of a response to Hutcheson’s request for proposals, said officials."

“We were the only qualified bid responder to Hutcheson’s RFP for a long-term lease agreement,” said Erlanger’s Chief Financial Officer Britt Tabor.

Erlanger’s Board Chairman Donnie Hutcherson said, “We have acted in good faith with regards to Hutcheson, but the time has come to expect repayment. As a responsible health care provider, an organization that fulfills its mission and conducts business in an orderly fashion, Erlanger must enforce its rights to full recovery of this loan.”

Erlanger officials stated, "Foreclosure does not necessarily mean that Hutcheson will cease operations as the community’s hospital.  On the contrary, the purchaser at the foreclosure sale will make the decision as to whether the facility remains or does not remain as Hutcheson Medical Center.  Regardless, Erlanger remains committed to meeting its longstanding and continued support of the health care needs of northwest Georgia."

"Erlanger is fully entitled to recover our $20.5+ million in loans to Hutcheson,” Mr. Spiegel said.  “Our employees and their families, our medical staff, the community we serve and our bondholders would expect nothing less.”


Latest Hamilton County Jail Booking Report

Here is the latest jail booking report from Hamilton County: BAILEY, JOYCE MARIE  2702 E 39TH STREET CHATTANOOGA, 37407  Age at Arrest: 39 years old Arresting Agency: Chattanooga CRIMINAL TRESPASSING THEFT OF PROPERTY (UNDER $500) --- BATES, JEREMY M  707 PARK AVE CHATTANOOGA, 37403  Age at Arrest: 36 years old Arresting Agency: Chattanooga ... (click for more)

Latest Hamilton County Jail Booking Report

Here is the latest jail booking report from Hamilton County: AARON, STEVE LYNN  2518 CRESCENT CLUB DR HIXSON, 37343  Age at Arrest: 50 years old Arresting Agency: East Ridge DOMESTIC ASSAULT DOMESTIC ASSAULT --- AKINS, JAVORIS  7604 STANDIFER GAP RD CHATTANOOGA, 37421  Age at Arrest: 20 years old Arresting Agency: Chattanooga DRIVING ... (click for more)

Parking Discrimination Downtown

Many taxpayers who reside in Chattanooga (but outside Chattanooga's core) feel left behind when it comes to neighborhood paving, sidewalks, policing, streetscaping, street sweeping, public transportation, and other services. Some think most tax dollars are spent on downtown and not in their neighborhoods. It's not as if they can't vicariously experience the largesse of downtown. ... (click for more)

Roy Exum: One Nameless Ghost

One hundred years ago the United States was at war. The most intense fighting during World War I was on what was called The Western Front. The Germans wanted to invade France from the north and in order to do it, they had to push through Flanders province in Belgium. It has been described as a hell unequalled in raw hand-to-hand combat, In just four months on Flanders fields, ... (click for more)

Smokies' Hurlers Limit Lookouts To Four Hits Sunday In 5-1 Win

The Lookouts drew six walks, but only managed four hits in their 5-1 loss to the Tennessee Smokies Sunday in front of a crowd of 5,356 fans at AT&T Field.    Chattanooga's loss drops them to 22-28 through 50 games in the Southern League North Division. Tennessee starting pitcher Brad Markey was lights out early for the Smokies, carrying a no-hitter into ... (click for more)

Tennessee-Georgia All-Star Football Classic Set For Saturday at CCS

The 13th Annual Tennessee-Georgia All-Star Football Classic, presented by Great Clips, is scheduled for 7 p.m. Saturday June 4 at Chattanooga Christian School in Chattanooga. Tennessee defeated Georgia 38-14 last June at McCallie School in Chattanooga. It was Tennessee's fourth consecutive victory in the series that dates back to the first game held at Ridgeland High in ... (click for more)