Board members of Westlake Regional Hospital met in a special called meeting Thursday evening and immediately went into executive session for one and half hours.
After executive session, board member David Herbst called the meeting. Board member Brad Keltner made a motion to accept the Chapter 9 Plan of Adjustment as modified. All votes were in agreement and the motion passed.
Westlake CEO Neal Gold said, “In executive session we worked with lawyers to put into plan with everything agreed to in the mediation and then that will be finalized tonight and submitted to court electronically. At 11 a.m. eastern Friday the judge will have a hearing and then send out for all creditors for voting on the plan. The creditors will have four weeks in order to vote and get back to the court. If all of the creditors and classes listed in the plan accept the plan and have full consensual plan it will allow us to have a confirmation hearing on the plan four weeks from tomorrow.”
He went on to say there would be a two-week period for a creditor to appeal what was in the plan. Since Westlake Regional Hospital and creditors came to a mediated agreement there shouldn’t be any further appeal or discussion with the plan.
Total debt the hospital started with is around $24 million. In the agreement, the pay back amount is around $12 million.
Adair County taxpayers will pay a hospital tax on their property bill for the next 11 to 12 years. It could take as long as 13 years. It depends on property valuations and whether they go up or down. The number of years is based on the 2014 tax collected from the taxpayers, which was $707,000.
There will be a payment up front on the real estate of $1.5 million and then for the first two years of the plan the unsecured creditors will receive payment. Then for the following years the tax will continue until the banks are fully paid off with the agreed amount.
“The important thing tonight is we have a finalized plan that is going into court tomorrow and voting will take place over the next four weeks, but because we have successfully completed a mediation we expect the plan to be approved. It will be a big surprise to everyone if for some reason it doesn’t get approved. We can’t think of any reason at this point why anyone would back out of what they agreed to in the mediation,” said Gold.
Westlake started with a debt of around $24 million. Because of the agreements with every agency that debt is cut to around $12 million. Without the agreement taxpayers could have been making payments for 20 or more years instead of 12.
There is a complete copy of the mediation plan available. More information will be available in the Dec. 24 Community Voice.
In addition to Herbst, board members Sharon Burton, Bruce White and Brad Keltner were present. Board member Richard Grant was not present.
By Mindy Yarberry