In a surprising (or maybe not-so-surprising, depending on your point of view)–development, UNC Health Care “prevailed Monday with an 11th-hour bid for bankrupt Morehead Memorial Hospital, a bid that was a whopping $11 million higher than its previous cash offer of just $500,000,” as the Greensboro News & Record reports.
Again–whether this development is surprising depends on your point of view, given that at last week’s bankruptcy hearing Judge Benjamin Kahn conceded that the sale to Empower iHCC–which initially had the higher bid—“appears to be the best scenario.” But UNC was granted a crucial few days to revise its bid and eventually prevailed, with a little from –you guessed it —the N.C. Department of Justice:
Empower executive Jorge Perez and his chief financial officer, Santiago Pique, both testified in the hearing Monday. But they couldn’t allay concerns expressed by Kahn and several lawyers for Morehead’s creditors that Empower lacked the financial wherewithal to pull off the transaction.
Under questioning by skeptical lawyers representing the North Carolina Department of Justice, hospital lenders and others, it emerged that the Florida partnership only had partial ownership of several hospitals that some of the submitted paperwork suggested were fully-owned subsidiaries.
From the bench, Kahn said that he adjourned the first part of the hearing last week with concerns about Empower’s ability to keep its promises and rescue a hospital system that is losing about $475,000 a week.
“The hearing today did not ameliorate the court’s concerns,” Kahn said.
Bottom line is the majority of Morehead’s patients are Medicaid and Medicare recipients. I understand that Morehead is a nonprofit, as is UNC Health Care. With that in mind, UNC Health Care Network Hospitals president Chirs Ellington said “the day this sale becomes official nobody should expect something miraculous to immediately happen.” Wise disclaimer.
