Bankruptcy Court poised to approve LRGH bankruptcy sale plan

CONCORD — Most objections to a $30 million agreement for Concord Hospital to purchase assets of LRGHealthcare – including Lakes Region General Hospital and Franklin Regional Hospital – were cleared during a U.S. Bankruptcy Court hearing Monday.

The main outstanding issue is an objection by the state.

Judge Michael Fagone ordered the state, Concord Hospital and LRGHealthcare to work through that objection before the hearing resumes on Wednesday at 1 p.m. He also said he will be ready to decide the matter himself if the parties can’t agree.

The judge is expected to approve the sale order Wednesday, although another hearing will be held on Jan. 20 to set the amount of money owed on various contracts, LRGH President and CEO Kevin Donovan said.

The state’s objection centers on its contention the sale would leave it without adequate ability to recoup upwards of $10 million owed in connection with a state program used to fund uncompensated care for those who can’t pay for health care. It also said the agreement would jeopardize its ability to collect a tax related to that program.

An auction that had been scheduled among parties interested in buying LRGHealthcare’s assets was cancelled because Concord Hospital emerged as the only health care institution interested in making an acquisition bid.

Once the parties are granted a final order, they can begin the process of seeking approval from regulatory agencies.

LRGHealthcare and Concord Hospital expect to complete this process in 2021.

LRGHealthcare filed for Chapter 11 protection under federal bankruptcy laws on Oct. 19, citing more than $100 million in debt. The move came after two years of efforts by LRGH to solve its financial problems through a merger or acquisition.

The health care system has 1,400 full- and part-time employees and is the largest employer in the Lakes Region.

Even before the impact of COVID-19, LRGHealthcare was consistently losing $1 million a month and hindered by the burden of servicing its large debt.

The court will approve a plan for relieving debt, chiefly a $111 million facility mortgage owed to Key Bank and insured by the U.S. Department of Housing and Urban Development.