The trustee in the bankruptcy of Hutcheson Medical Center is asking a judge to authorize the sale of the financially-ailing Fort Oglethorpe Hospital at auction.
Trustee Ronald Glass said there would be more value if the hospital is sold as a going concern (still operating) rather than it having closed due to mounting debt.
He is proposing that bidders for the hospital and its assets, including a nursing home and a surgery center, be pre-qualified to determine that they have the financial ability to make the acquisition and the ability to operate the facility.
The 27-page motion says, "The trustee believes that the sale of the sale assets as requested herein will provide a significantly greater realization for the sale assets than the liquidation value that would be obtained if the sale assets were not sold expeditiously in the manner requested herein and the debtors' business was forced to cease operations."
There would be an auction date set that would be attended by only qualified bidders, the trustee, Regions Bank, the Creditors Committee and attorneys.
The motion says it is anticipated that a winning bidder would want to retain current Hutcheson employees, but that is not a requirement.
The trustee reserves the right to reject the bids.
The process would allow a "stalking horse bid." That is defined as "an attempt by a debtor to test the market in advance of an auction. The intent is to maximize the value of its assets as part of (or before) a court auction in case of bankruptcy." An early bid would give an indication of the potential hospital value, it was stated.
The motion was filed late Tuesday afternoon in Rome, Ga.
The motion asks for an immediate hearing on the motion to hold the auction.
Hutcheson filed for bankruptcy last November, but since then has acquired over $6 million in additional debt, it was stated at a recent hearing.
The motion says, after the bankruptcy was filed, "the debtors determined, with the guidance and advice of its professional advisors, the Committee and Regions, that the best and most efficient exit strategy for the debtors from bankruptcy is a sale of some or all of the debtors' assets to one or more purchasers."
Guggenheim Securities has been seeking buyers for the hospital.
Trustee Glass said he agrees "that the best and most efficient exit strategy for the debtors' estate is a sale of some or all of the debtors' assets."
He said Regions Bank "has a first-priority, properly perfected lien and security interest in all or substantially all of the debtors' assets."
Trustee Glass said, "In light of the debtors lack of liquidity, it is imperative that the debtors' assets be sold as expeditiously as possible."
He said a qualified bidder could bid on either a portion of the hospital assets or all the assets.
Hutcheson is one of the largest employers in the Tri-County area with over 800 employees.