Erlanger demands $8.7M in suit over $20M hospital loan

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Chattanooga, Tenn.-based Erlanger Health System has filed a motion for summary in its pending lawsuit against Walker County, Ga., in an attempt to recoup part of a $20 million loan Erlanger made to a Georgia hospital, according to The Chattanoogan.

Erlanger made the $20 million loan to financially troubled Fort Oglethorpe, Ga.-based Hutcheson Medical Center in 2011. Catoosa and Walker County officials guaranteed the loan. Hutcheson Medical Center filed for Chapter 11 bankruptcy protection in 2014. Without enough cash flow to support itself, the hospital closed Dec. 4. However, after securing a buyer, the hospital was able to reopen just three weeks later.

After the hospital was sold, Erlanger filed suit to recoup its loan. In its lawsuit, Erlanger claimed Catoosa County officials were cooperating with Erlanger to pay back the money, but Walker County officials were not. In June, the Catoosa County Commission accepted a settlement agreement, under which the county will pay Erlanger $6.2 million.

In its recently filed motion for summary judgment, Erlanger is seeking $8.7 million from Walker County, according to the report. 

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