Tennessee hospital files for bankruptcy

Lauderdale Community Hospital in Ripley, Tenn., filed for Chapter 11 bankruptcy protection March 8.

Lauderdale Community Hospital is owned and operated by an affiliate of Kansas City, Mo.-based EmpowerHMS. The hospital has faced financial challenges for months, and a federal judge appointed a receiver to oversee the hospital's finances in February, according to WMC Action News 5.

On March 6, the receiver filed a motion in bankruptcy court seeking permission to file a bankruptcy petition on behalf of the hospital. The receiver claimed that the hospital wouldn't be able to pay bills and critical vendors without entering the bankruptcy process.    

The receiver's motion was supported by a local bank, which said it would "provide an immediate short-term influx of necessary funds … upon the filing of a case under Chapter 11."

CAH Acquisition Company 11, the EmpowerHMS affiliate that operates the hospital, missed the deadline to respond to the receiver's motion.

"Defendant's silence, in line with its previous failure to weigh in on or explain the financial confusion at the hospital, is one more factor in favor of approving the receiver's course of action here," the bankruptcy judge said in her order granting the receiver permission to file the bankruptcy petition.  

In the bankruptcy petition, the receiver listed the hospital's assets as between $1 million and $10 million and listed its liabilities in the same range.

The bankruptcy filing is part of a plan to save the hospital that Lauderdale County leaders presented March 11. Officials said a management group has submitted a nonbinding offer to take over the hospital, according to WMC Action News 5.

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