As planned, North Texas Community Hospital in Bridgeport filed for Chapter 11 bankruptcy protection last Thursday afternoon in U.S. Bankruptcy Court in Fort Worth.
The bankruptcy filing includes information about more than 2,000 creditors who are “unsecured” and unlikely to receive any payment from the bankrupt hospital. On the list are medical supply companies, insurance providers, local companies, community organizations and a surprisingly high number of individuals scattered throughout the area.
The Wise Regional Health System’s board of directors voted Nov. 5 to bid $20 million to purchase the hospital’s assets out of bankruptcy, pending an auction which would be held only if another bidder emerges.
Wise Regional’s bid includes a $1 million loan to keep the Bridgeport hospital up and running until the court proceeding runs its course and it can emerge as a branch of the Decatur-based health system.
The hospital listed assets between $10 million and $50 million, and liabilities between $50 million and $100 million.
The bankruptcy document states that “the debtor estimates that, after any exempt property is excluded and administrative expenses paid, there will be no funds available for distribution to unsecured creditors.”
The hospital’s bonded debt is pegged at around $59 million.
The hospital’s biggest unsecured debt is to the City of Bridgeport, which guaranteed a line of credit and also extended credit to the hospital for utilities. The hospital owes the city $3,393,580.74 according to the court document.
Close behind is the physicians’ group that originally backed the facility, NTCH Guarantors, LLC. Steven Longacre, M.D. is the addressee on the court document. The hospital owes the group $3,107,724.23 under an agreed judgement.
Only one other creditor tops the half-million mark – and that is the hospital’s own employee health plan, which has a payment of $567,165.62 outstanding.
The rest of the top 20 includes only three local creditors. Charlene Blaylock, CRNA, is owed $275,000 on a loan she made to the hospital. West 380 MOB, LLC – the medical office building adjacent to the hospital – is owed $137,766 in rent. And Dr. Scott Stowers, D.O., of Bridgeport is owed $53,550 in professional fees.
Other “Top 20” unsecured creditors include:
4) $357,408.67 to Boston Scientific Corp., Dallas, trade debt;
6) $240,110.08 to Century Link, Phoenix, Ariz., utilities;
7) $188,740.00 to Hospira, Dallas, agreed judgment;
9) $122,809.25 to Bridge Staffing Inc., Mobile, Ala., contract labor;
10) $110,000.00 to Quorum Health Resources, LLC, Brentwood, Tenn., arbitration award;
11) $106,907.26 to Johnson & Johnson, Chicago, Ill., trade debt;
12) $91,125.86 to Hunton & Williams, Dallas, attorney fees;
13) $81,687.26 to Owens and Minor, Dallas, trade debt;
14) $79,594.20 to Texas Hospital Insurance Exchange, Austin, insurance premium;
15) $65,794.45 to Medical Solutions Inc., Omaha, Neb., contract labor;
16) $57,678.20 to Arthrex, Atlanta, Ga., trade debt;
18) $52,950.00 to Meditech, Chicago, Ill., trade debt;
19) $52,844.00 to Vaughn Construction, Houston, trade debt;
20) $50,000.00 to Hollingsworth Walker, Nona B. Walker, Dallas, settlement agreement.
Altogether, the top 20 unsecured creditors are owed nearly $9.2 million.
NTCH opened in September of 2008 and has been in default to its bondholders since May of 2009. Given the bid by Wise Regional, even those bondholders will likely see less than a third of their original investment returned.
The hospital has 35 beds and sits on approximately 19 acres. The county’s growing population and Wise Regional’s ongoing growth make it a good fit for the home-based health system. The NTCH facility could be expanded to a third floor and another 35 beds if needed, and the adjoining property makes it even more attractive.
A key component of WRHS’s bid is that the hospital remain open and merge into the new system as an “up-and-running” entity.
Neither hospital’s CEO expects another bidder to emerge, but if one did, an auction would be held by mid-January according to the timetable approved by WRHS directors last week. The asset sale should be approved by around Jan. 17 and the sale transaction should be completed by around March 20.