”It’s a complicated deal with a lot of moving parts.”
That’s how Max Ludeke, CEO of North Texas Community Hospital in Bridgeport, described the 11th-hour agreement to keep the hospital open until it emerges from bankruptcy as part of Wise Regional Health System.
Last Friday, Wise Regional CEO Steve Summers announced that bondholders had stepped up to provide funds to ensure the hospital can continue operating through March 26. That’s when all the lawyers and representatives of both hospital systems will sit down and sign documents tranferring ownership of the hospital to Wise Regional.
But closing the deal without closing the doors has been a challenge.
Since the bankruptcy was announced in early November, cash flow has steadily declined, leaving the facility in danger of not being able to stay open – a condition of the transaction. Although there’s been no dropoff in patient services, the behind-the-scenes battle to find operating money has been tense at times.
No money has been transferred yet as a result of the latest arrangement, Ludeke said. But the first of two “draws” could be forthcoming within a few days of a Wednesday morning hearing in the Fort Worth federal bankruptcy court.
“All the particulars are continuing to evolve,” he said Tuesday afternoon. “We’re on the phone with the bondholders’ counsel trying to figure out all the details. There’s a lot of hard work going on right now, getting all the documentation and motions finalized.”
The details will emerge at the 9:30 a.m. hearing Wednesday, Ludeke said.
“I really don’t know what’s going on on the other side of the curtain,” he said. “Most of these bondholders are represented by at least two counsel. I’m copying eight people on everything.”
But, he stressed, everyone is on board and working hard to secure funding and stabilize the hospital’s finances until the change in ownership.
“All the parties – the bondholders, our board, the Wise Regional board, myself, Mr. Summers – everyone is working toward a smooth transition and the sale of the hospital, to the benefit of the community. That’s what this is all about.”
North Texas Community Hospital, which opened in 2008, has been in default on more than $59 million in construction bonds since 2009 and also ran up substantial unsecured debt to the City of Bridgeport, a doctors’ group and other creditors. It declared bankruptcy Nov. 8 after working out an agreement with Wise Regional Health System in Decatur to submit a bid of $20 million to purchase it.
Of that, $1 million was in cash as a debtor-in-possession loan and $19 million was to go to the holders of those original bonds.
That deal – approved by the federal bankruptcy court and the Texas Attorney General’s office – is still in place, Summers said Tuesday.
“Our deal did not change,” he said. “The cash isn’t coming from Wise Regional. We’re still going to issue $19 million in bonds, and the closing date is still set for March 26.”
Summers said Wise Regional is still working toward that date to take over operation of the hospital, retaining almost all of the employees and keeping it open as a full-service hospital after a brief transition period.
Ludeke said the money will probably come in two “draws” – one perhaps within a few days, and the majority after the transition in ownership.
For breaking news that may emerge from Wednesday morning’s hearing in Fort Worth, stay tuned to the Messenger website.