Thursday, June 24, 2010

LifePoint bid for Sumner hospital approved

LifePoint Hospitals Inc. received bankruptcy court approval for its offer to buy Sumner Regional Health Systems on Wednesday.
A decision on how sale proceeds are to be distributed will come later.

U.S. Bankruptcy Court Judge Marian F. Harrison of Nashville said at a hearing that LifePoint has the financial wherewithal to carry out the purchase, adding that it's in the best interest of creditors. Harrison dismissed several objections that had been made by Sumner County.

"The county's objection to LifePoint's abilities to perform its obligations is without merit," Harrison said.

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Brentwood-based hospital chain LifePoint offered to buy the Gallatin-based hospital system for $156 million and an additional $60 million of capital spending.

Court approval was required under the agreement that came along with a bankruptcy filing from Sumner Regional.

Whether the county should be paid before or after bondholders for its interest in real estate of the hospital system's flagship, Sumner Regional Medical Center, was among the issues that the county raised.

Also argued in court were questions over who would offer medical care to county inmates, a function that Sumner Regional Medical Center had handled. Harrison acknowledged the issue had been in dispute but said the sale agreement doesn't require LifePoint to offer such care.

Still, LifePoint has agreed to assume services to inmates for the remainder of the year, while committing to provide 1 percent of annual net revenue of Sumner Regional Medical as charity or indigent care.

Approval needed for sale

"We look forward to the opportunity to talk to the county about meeting the ongoing needs of the community, including inmate care, and providing significant new tax revenues and other benefits to the County on a long-term basis," said Diane Huggins, a LifePoint spokeswoman.

The sale still requires approval from Tennessee's attorney general because it involves the acquisition of a not-for-profit entity by a for-profit hospital company.

Getahn Ward covers the business of health care for The Tennessean. He can be reached at 615-726-5968 or at
Sarah Kingsbury of Gannett Tennessee contributed to this story.

Short Sale NegotiatorsLifePoint Hospitals remains sole bidder for Sumner Regional