Sadler Clinic originally filed for Chapter 11 bankruptcy, which meant the practice was looking to reorganize. However, HCA Physician Services, an affiliate of Hospital Corporation of America in Nashville, Tenn., requested the clinic convert to Chapter 7, which is a full liquidation of assets.
In February, HCA bought most of Sadler Clinic‘s assets for $21.3 million. Through an affiliation agreement, HCA agreed to pay $8.9 million and advanced roughly $3.4 million of that total to the clinic. However, the affidavit said HCA “refused to pay the rest of the money owed through the agreement” and would not help to restructure the clinic, which caused problems with Sadler and its debtors.
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