‘Time is of the essence’
Hospital bankruptcy proceedings continue
DES MOINES — A new bankruptcy deal for Central Iowa Healthcare is in the works.
CIH bankruptcy attorneys and financial consultants, Unity Point Health, federal bankruptcy court trustees, and a committee of vendors owed money by CIH said they expect to have a new deal in place for the court to review.
Although details remain confidential, the parties publicly stated their intent to come to a resolution in the urgent matter before Federal Bankruptcy Judge Anita Shodeen Wednesday in Des Moines.
Consequently, Shodeen agreed to a continuance to Jan. 27 (It was the second continuance granted by the court. The first being to re-schedule a hearing initially set for Jan. 13 to Jan. 18).
All will re-convene to present the deal in writing at 9 a.m. that day in Suite 300 in the United States Bankruptcy Court, 110 E. Court Ave. in the Southern District of Iowa in Des Moines.
“We are starting over and going back to square one,” said Des Moines bankruptcy Attorney Jeff Goetz, of Bradshaw, Fowler Proctor & Fairgrave, hired by CIH to help steer it through the complex proceedings.
Working with Goetz is Chicago attorney Mark Melickian.
Importantly for CIH, the continuance means interim financing from UPH remains in place, and all CIH health care operations will continue without interruption.
The agreement to restructure a new deal came to be only after the court granted two 30-minute recesses specifically for negotiations, followed by a nearly two-hour recess and lunch where negotiations continued.
CIH filed for Chapter 11 bankruptcy on Dec. 20.
Chapter 11 Bankruptcy is a legal process designed to help organizations continue operations, sell assets and restructure liabilities.
The bankruptcy was brought on by months of serious financial losses.
For example, a report by CIH Director of Finance Mary Pfantz at the Jan. 10 corporate membership meeting revealed CIH lost $15,119,319 as of Nov. 30, 2015. One year later — as of Nov. 30, 2016, the loss had increased $3.6 million to $18,741,619.
Shortly after Dec. 20, the bankruptcy court issued a notice It would set in motion a process whereby the court and a committee of vendors would begin determining payments, if any, to vendors owned money by CIH.
Additionally, it was stated the court would evaluate a bid submitted by UnityPoint Health-Waterloo to purchase CIH assets for $12.5 million.
At its annual meeting last week, CIH corporate members approved by 88-0 vote authorizing the sale to UPH-Waterloo.
CIH would cease being an independent hospital if the bankruptcy court approves the sale to UP-Waterloo or another bidder.
Representing CIH in bankruptcy court Wednesday were Acting Chief Executive Officer Dawnette Willis, Board of Trustees President Carol Hibbs and Trustee Mike Mason.
They were joined by financial consultants Ronald Winters and Krista Lovingfoss of Alvarez & Marsal of New York City, N.Y.
“Time is of the essence,” said Willis, after court adjourned for the morning and the principals were off to Round 3 of negotiations.
Also in attendance were attorneys and representatives for numerous vendors owed money by CIH.
They included Great Western Bank of Marshalltown, CBC of Marshalltown and ICE Technologies, among many others.
CIH is a 103-year old, not-for-profit health care provider which serves thousands of residents in several Central Iowa counties.
Headquartered in Marshalltown, it employs more than 500 healthcare and other professionals.
Assets include a 49-bed acute care hospital, emergency department, and outpatient clinic in Marshalltown.
Additionally it has four primary care clinics (Conrad, Marshalltown, State Center and Tama-Toledo).
CIH is the only full-service medical center in its area and more than 60,000 residents utilize it for a wide variety of healthcare services.
“I wish to thank everyone for their work,” said Shodeen before adjourning court for the day. “There is a lot at stake for CIH, their patients and employees. Hopefully, we will be able to sign orders (on Jan. 27).”