Hospital authority attempts to void Erlanger settlement

The Hospital Authority of Catoosa, Dade and Walker counties voted to void a prior meeting where a deal was made between Catoosa County officials and Chattanooga, Tenn.-based Erlanger Health System, according to the Times Free Press.

During a meeting in May, members of the Hospital Authority voted to let Chairman of the Board Darrell Weldon, MD, execute a settlement with Erlanger, according to the report. As part of the agreement, Walker County would pay Erlanger nearly $8.5 million.

Now, board members are saying that the meeting was called illegally. According to the board's bylaws, all meetings must be called in writing at least three days in advance. Dr. Weldon's son requested the meeting by email, which is a clear violation.

If the meeting is voided, board members argue that the deal is voided as well.

An Erlanger lawyer told the Times Free Press the board's vote does not impact the deal because it has already been signed.

The dispute stems from a $20 million loan Erlanger made to now-defunct Hutcheson Medical Center in Fort Ogelthorpe, Ga., in 2011. Catoosa and Walker County officials guaranteed the loan, promising each county would pay Erlanger $10 million if Hutcheson didn't have the funds to repay the funds.

In May, a district court judge ruled that Hutcheson owed Erlanger about $36 million. Becuase the hospital does not exist anymore, Erlanger sought payment from Catoosa and Walker counties. In June, the Catoosa County Commission accepted a settlement agreement, under which the county will pay Erlanger $6.2 million.

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