Bob Hansen and Darrell Smith, Connersville News-Examiner
Thursday's auction of bidders for Fayette Regional Health
System was called off when no one submitted a high enough bid. But
negotiations for the sale of the hospital were continuing Thursday,
according to an attorney.
According to a notice about the sale
filed late Wednesday in U.S. Bankruptcy Court, none of those who
submitted bids qualified for the auction because the bids were not high
enough. One of the sale conditions was that a successful bid would need
to cover hospital liabilities.
The hospital has been in Chapter
11 reorganization under federal bankruptcy laws since last October.
Parties interested in buying the hospital had until Tuesday to submit
written bids. On Wednesday, attorneys and others were to review the
bids. If more than one qualified bid had been received, the qualified
bidders were to be invited to a live auction on Thursday morning where
they could increase their bids.
At about 5:30 p.m. Wednesday, the
hospital's bankruptcy lawyer, Wendy Brewer, notified the Connersville
News-Examiner that "the Auction has been adjourned at this time and will
not be taking place" Thursday.
In response to the newspaper's
questions about next moves in the case, she issued this statement by
email on Thursday morning: "Fayette (Regional) and the Consultation
Parties (the Committee and the Lenders) are continuing to negotiate with
the bidders. Until those confidential negotiations are complete, we
will not be in a position to issue a public statement on the matter."
According
to Sen. Jean Leising (R-Oldenburg) in her remarks at a local legislative forum on
Thursday, the hospital had owed $15 million to $16 million to a bank
that had to be resolved by the sale. She is hopeful the hospital can
continue in operation, noting that in three of the six counties she
represents, there is no local OB department for expectant mothers.
Fayette Regional closed its OB department last fall.
Leising said
she had prepared language for the state budget to help Fayette Regional
if the County Commissioners had decided to try to make Fayette Regional a
county hospital. However, that didn't work out, so the language was not
added to the budget.
Leising said, "I can't speak for the county
but I'm assuming it's the indebtedness of the hospital. It's my
understanding it's $15-16 million with a New York bank."
An
audience member Thursday asked what had happened with a state grant that
helped pay for construction related to the North Star Recovery program,
a substance abuse treatment center that opened amid fanfare last
summer. Leising said the state attorney general's office has been
contacted about the matter but has not answered. The governor's office
is also involved, she said.
She has tried to stay connected
with people involved in trying to keep the hospital open. She met with
Mike Dora of the U.S. Department of Agriculture's Indiana Rural
Development Agency. They spoke with Senate Appropriations
Committee Chairman Ryan Mishler (R-Bremen), she said, and they met with Tim
Kennedy, who is knowledgeable on hospital law in the state.
Kennedy
is the Indianapolis-based attorney that county officials hired to help
in any potential contacts with would-be purchasers. Gary Naylor,
president of the commissioners, said last Saturday that the county had
made contact with some potential purchasers but none had responded, as
of that time. He said then that the county wants to keep a full-service
hospital in Connersville.