The bankrupt Barnwell County Hospital signed an asset purchase agreement with Atlanta-based Resurgence Management Company in March, which is now vulnerable to the federal judge’s ruling on whether its board has the authority to make the decision.
Barnwell County council members appointed themselves to replace the hospital’s board in 2011 after it had declared bankruptcy. The council later approved a sale of the hospital to Dobbs Equity Partners, a Memphis, Tenn.-based firm that would have merged Barnwell County Hospital with Bamberg (S.C.) County Hospital, which had also declared bankruptcy.
The sale never occurred because Dobbs missed a closing deadline, but some council members had already filed a lawsuit against the council’s appointment to the hospital board. The South Carolina Supreme Court ruled in May that council members wrongly held dual offices, which invalidated their decisions about the hospital.
The asset purchase agreement had already been finalized in March, two months before the state Supreme Court decision, and the asset purchase is subject to federal bankruptcy court jurisdiction.
Federal Bankruptcy Judge David Duncan has said he will further review the state Supreme Court decision before announcing whether he will allow the sale to move forward.
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