Auction set for LRGHealthcare’s assets

LACONIA — An auction has been set for 10 a.m. on Dec. 16 for the assets of LRGHealthcare, including Lakes Region General Hospital and Franklin Regional Hospital, under a schedule agreed to in U.S. Bankruptcy Court in Concord as part of bankruptcy proceedings.

Two weeks ago, LRGH, saddled with more than $100 million in debt, filed for reorganization under Chapter 11 of the federal bankruptcy code.

Concord Hospital has offered to acquire LRGH’s assets for $30 million and run the facilities. This will serve as an initial bid that could go higher. LRGH has more than $100 million in real estate holdings alone.

Other companies could exceed the $30 million offer, and Concord Hospital would have an opportunity to then increase its bid. Money from the sale would be applied to debt, largely the $111 million LRGH owes to KeyBank through a mortgage insured by the U.S. Department of Housing and Urban Development.

A timeline for the auction process has been entered into the court record.

It calls for the Dec. 16 auction to be held at the Offices of Nixon Peabody, LLP, at 900 Elm Street, Manchester, with the possibility of a virtual, Zoom-type meeting. A deadline for bids has been set for 4 p.m. Dec. 14.

A sale hearing has been set for Dec. 21.

The filing in U.S. Bankruptcy Court came after two years of efforts by LRGH to solve its financial problems through a merger or acquisition.

The company financed major improvements through debt over the years even as it struggled to receive adequate revenue for medical services rendered, a widespread problem throughout the hospital industry.

Kevin W. Donovan, LRGH president and chief executive officer, has said that no layoffs or benefit reductions are planned for the system’s 1,400 full- and part-time employees and that health care services offered to the public will remain in place and could be enhanced after the sale.

LRGH is the largest employer in the Lakes Region.