The sale of Westlake Hospital to T.J. Samson Regional Health seems to rest solely on the resolution of Westlake’s Chapter 9 bankruptcy.
Currently in its final stages, CEO Neal Gold and board members of the hospital remain optimistic that next week’s mediation between them and one of their largest creditors will lead to an agreement satisfying both parties. If all goes as planned, Westlake would be in the hands of T.J. by Jan. 4, the original acquisition date.
During Tuesday night’s regular monthly meeting, Gold told those in attendance that recently the hospital’s primary focus has been on the two biggest topics at hand – acquisition by T.J. and resolution of the bankruptcy.
“Last week’s court date, the plan of adjustment was supposed to be up for confirmation, but several issues were brought up by banks and creditors,” Gold explained.
One of those creditors objecting to the hospital’s plan of adjustment is Farmers National Bank of Danville, to which the Adair County Hospital District owes around $15 million.
Gold feels like the upcoming mediation will be good for both parties. “We’re at least getting closer, but these are obviously very complex issues and clearly we’re still very far apart between where we feel we can actually accommodate payment to the creditors as opposed to what the creditors would like us to accommodate. I think we’re making progress – at least we’re all talking, because for a while no one was even talking.”
“We have a very committed buyer,” he added. T.J.’s CEO and their legal team did attend the hearing last week in Louisville.
Gold went on to explain that the judge in their case is pushing for a consensual plan where all parties are in agreement as opposed to a forced or crammed down plan where the judge forces the creditors to accept what Westlake has proposed. A consensual plan creates a safer end result because it closes the door for any future litigation whereas a forced plan leaves that door open.
During the meeting, CFO David Hayes gave the October financial report. Westlake and its affiliates showed a net gain of $276,723 – a sum in the black due solely to monies received from the DSH program ($282,511) and tax revenue that has begun to stream in ($382,947). Year to date the hospital remains in the red just over $452,000.
“We continue to struggle with cash flow and are doing everything we can to conserve and maintain that,” said Gold.
In the end, the board voted to enter executive session to discuss upcoming mediation with their lawyers via conference call. Upon returning two hours later, Board Chairman Richard Grant said the only action taken was an agreement to hold a special called meeting on Dec. 3 in Louisville during the scheduled mediation so as to allow the board to enter executive session at that time. Mediation is closed to the public.
All members of the board were present at include: Richard Grant, Brad Keltner, Sharon Burton, David Herbst, Bruce White.