Hutcheson, Erlanger Stop Warring For 60 Days While Focus Is On Rescuing Troubled Fort Oglethorpe Hospital

Thursday, August 20, 2015
Hutcheson Medical Center and Erlanger Health System have agreed to stop warring for at least 60 days while the focus is on trying to rescue the troubled Fort Oglethorpe medical facility.

Bankruptcy Judge Paul Bonapfel said, “The real people I am concerned about is the community the hospital serves and, after that, the hospital employees.”

He said the hospital appears to be sinking in debt, “and here we have six warring parties with all these lawyers – four or five for each one.”

Judge Bonapfel added in the hearing on Thursday morning at Rome, Ga., “It might be better to have these warring parties put their heads together to keep this ship from sinking, rather than fighting over salvage rights.”

He said leaders of 501(C)(3) facilities "are suppose to be serving the community, but collectively or individually have not been able to solve this problem.

In fairness, there may not be a solution. But from a policy standpoint, this is very disturbing and very distressing."

And he added, "This is no time to be rearranging the deck chairs on the Titanic."

Martin Ochs of the U.S. Trustee’s Office said the hospital appears to be losing about half a million dollars per month since it filed for bankruptcy protection 10 months ago.

He said eventually patient care could be affected.

Rob Williamson, Hutcheson attorney, said, “Patient care has not suffered. In some ways it is better than when this action was filed.”

Trustee Ochs said his office wants to press on with a request that the bankruptcy be dissolved, saying that large debts are accruing. He said, “Every day we wait it gets worse.”

Judge Bonapfel said he is most concerned about any shortfalls that may affect employee paychecks and healthcare coverage.

A hearing was set for Sept. 2 at Rome on the issue of whether the bankruptcy should continue.

A key witness will be the patient ombudsman, who has been making regular reports to the court about the condition of patient care at Hutcheson.

In the meantime, Judge Bonapfel said officials need to be following through on prospects for selling the hospital.

He said, if that happens, there is still the issue of liens on the property and the $20 million that Erlanger put into the facility and now wants back, with interest.

Erlanger has liens on the hospital and nearby nursing home, while Regions Bank has a lien on the surgery center on Battlefield Parkway.

A further complicating factor is that Hutcheson Medical Center operates under a lease with the Hospital Authority of Walker, Catoosa and Dade counties that does not expire until 2035.

Judge Bonapfel said, “It would be a disaster to shut that thing down.” He said once the air conditioning is turned off there may be problems when it and other building systems go back on, and he noted that when hospitals close there is a re-licensure process to go through later.


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