Judge appoints receiver for Kansas hospital after bank forecloses

An Oklahoma-based management company will run Hillsboro (Kan.) Community Hospital after a bank moved to foreclose on the facility, according to a Kansas News Service report.

A Marion County, Kansas, judge appointed Shawnee, Okla.-based Cohesive Healthcare Management + Consulting to operate the 15-bed hospital, finding that "immediate and irreparable harm is likely to result if a receiver is not appointed to operate and manage the hospital in order to ensure that it remains open and retains as much of its value as possible," the report states.

The judge's appointment of a receiver reportedly came at the request of the city of Hillsboro and Bank of Hays. The bank, in a Jan. 8 petition to foreclose on the hospital, claims that the hospital owes debt on a $9.7 million construction loan issued in 2015.

Hillsboro Community Hospital has been managed by Kansas City, Mo.-based EmpowerHMS, which is facing financial challenges and has worked with the city of Hillsboro to pay the hospital's utility bills. The hospital avoided having its utilities shut off earlier this month after a last-minute payment was made.

Tyler Heffon, an attorney for the Bank of Hays, told Kansas News Service that the appointment of a receiver "was essential to maintaining community access to healthcare while the foreclosure lawsuit proceeds through the court system."

 

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