As the clock ticked down toward 5 p.m. Monday in the Fort Worth offices of U.S. District Judge Michael Lynn, it became apparent that only one bidder had emerged in the sweepstakes for North Texas Community Hospital.
Wise Regional Health System’s $20 million offer was the only one on the table.
Although a mountain of details remain to be worked out, Monday’s action means Wise Regional will likely be declared the “successor” to the Bridgeport facility at a sale hearing scheduled next Monday, Feb. 4. The transaction is expected to close in mid-March, and the hospital in Bridgeport will remain open as part of the Wise Regional Health System.
North Texas Community Hospital, which has also been known as West 380 Family Care Facility and Doctors’ Hospital, opened in August of 2008. The sparkling, still-new hospital has 35 beds and state-of-the-art imaging, diagnostic and surgery facilities – in addition to a dedicated staff and loyal community.
By the following May, it was already in default on its bonded debt of $59,130,000. The hospital also obtained two lines of credit worth $3 million, one secured by the City of Bridgeport and the other by a physicians’ group, NTCH Guarantors, LLC.
Both are unsecured creditors and unlikely to see any return on that investment.
But the hospital, which serves not only west Wise County but underserved areas farther west, will continue to operate, serving its community and filling a real need in the Wise Regional Health System.
That continued operation is where most of the details remain to be worked out, according to Wise Regional CEO Steve Summers.
“There were no other bidders, but that does not mean this is ready to go,” he said Monday night after a Decatur Hospital Authority board meeting. “We’re going to stay in communication with the North Texas Community Hospital administration.
“There are some things we’ve been working on and it’s been positive,” he continued. “I expect that in the next week or so we’ll try to set up a meeting, meet some of their folks, say hello and start that relationship process.”
Summers’ board Monday night authorized him to contract for services and supplies, employ staff, enter into leases and rentals, modify insurance coverage and “effect other necessary matters” to allow for the continuity of operations at the Bridgeport hospital upon the closing of the transaction – within an already established budget, assuming Wise Regional is indeed the successor.
Among the issues to be worked out are salaries, physician and other professional fees, contracts for equipment and other services, lease agreements, and personnel. Wise Regional plans to realize numerous efficiencies in the operation by combining services from administration on down.
Meanwhile, Wise Regional will be required to publish notices and hold public hearings on the issuance of $19 million in “replacement bonds” to the holders of NTCH’s debt. The plan is to issue new bonds to those bondholders, replacing their original bonds with tax-free municipal bonds at an interest rate of about 6.5 percent – similar to what they got in 2008 when they originally bought them.
The fact that Wise Regional is also a not-for-profit hospital was a decided advantage in the bidding over a for-profit hospital company.
Several other health-care entities requested documents and were considering bidding on the Bridgeport facility. If anyone else had bid, the federal judge would have held an auction in court on Wednesday morning.
Now, the next milestone is the Feb. 4 hearing.
NTCH filed for Chapter 11 bankruptcy protection on Nov. 8, after Wise Regional’s board met Nov. 5 and voted to offer $20 million for the hospital, including a $1 million debtor-in-possession loan and $19 million for the hospital’s assets.
Summers said the acquisition of the facility will provide needed relief for Wise Regional’s Decatur campuses and could delay the need for additional construction there for several years.