Concord Hospital emerges as lone bidder for LRGH in bankruptcy

LACONIA — Concord Hospital is the sole health care institution interested in acquiring Lakes Region General Hospital, Franklin Regional Hospital and the hospitals’ ambulatory sites through Chapter 11 bankruptcy proceedings, LRGHealthcare President and CEO Kevin Donovan said Tuesday.

“While LRGHealthcare received significant interest from other parties, no other party submitted a bid by the deadline,” Donovan said. “We have always felt that Concord Hospital is a natural fit to ensure the continued provision of excellent care in the Lakes and Three Rivers Region, and we are excited about this step forward.”

LRGHealthcare has filed a motion in federal bankruptcy court to cancel a bankruptcy auction set for Wednesday. Multiple bidders present offers at such an auction, but it will not be needed as Concord Hospital has emerged as the only bidder.

The next step will be a sale hearing where a final order will be issued by the court.

Once the parties are granted a final order, they can begin the process of seeking approval from regulatory agencies, including the New Hampshire Attorney General’s office and the New Hampshire Department of Health and Human Services.

“We are encouraged by the prospect of preserving access to local, high-quality health care for years to come. As we continue to move forward with the necessary approvals, nothing changes for LRGHealthcare employees or patients. There is still more work to be done to finalize Concord Hospital’s acquisition, but we are moving forward in the right direction,” said Donovan.

President and CEO Robert P. Steigmeyer said the fact that there are no additional bidders for the assets of LRGHealthcare is positive news for the creation of a sustainable community health system for the region.

“Today, Concord Hospital is one step closer to assuring community-based care for people in the Lakes and Three Rivers regions,” he said. “We look forward to completing the purchase and getting to work on that goal.”

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 on an unsustainable path, 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.

Concord Hospital has made an initial bid of $30 million for these assets, including the two hospitals and the system’s ambulatory care centers. That bid was less than half of the $72 million assessed value of Lakes Region General Hospital and Franklin Regional Hospital.

A sale hearing was set in U.S. Bankruptcy Court for Dec. 21.

Concord Hospital and LRGHealthcare arrived at an asset purchase agreement that was filed in bankruptcy court on Oct. 19 and set the purchase price at $30 million.

Concord Hospital was the so-called "stalking horse," meaning the agreed-upon price would be the initial bid at auction.

Many hospitals have merged in recent years – in New Hampshire and around the country – to realize greater efficiency and economy of scale.

LRGHealthcare and Concord Hospital are both not-for-profit institutions. They already collaborate in various health care areas.

Steigmeyer said that under the proposed acquisition, Concord Hospital’s Board of Trustees would include representatives from the Three Rivers and Lakes Region. He also said that Concord Hospital would assume pension liability and staffing would be maintained.