Erlanger Health System officials said a settlement of issues involving Hutcheson Medical Center will pave the way for Erlanger to go after millions of dollars pledged by Catoosa and Walker counties.
"This allows us to go get back our $20 million," Erlanger Chief Legal Officer Jeff Woodard said.
Erlanger sank $20 million into the struggling Fort Oglethorpe hospital during a time it managed Hutcheson. The $20 million was backed by the two counties at $10 million each. Dade County, also a member of the three-county Hospital Authority group, opted not to pledge any security.
Hutcheson then failed, and Erlanger is now ready to come calling against the counties.
Attorney Woodard noted that money Erlanger is getting from the sale of some of the Hutcheson assets will count against the counties' debt.
Erlanger is set to get $1.2 million from the proceeds of the sale of the hospital and $1,390,000 from the sale of the nursing home and child care center. Erlanger is also to get $225,000 if the doctors office building is sold, and there are some other pieces, including some vacant land and some offices.
That leaves the obligation of the counties still at above $17 million.
Erlanger had claimed as much as $32 million, counting fees and interest. However, in the settlement Erlanger waived any amounts above the $20 million.
Attorney Woodard noted that Hutcheson wound up some $80 million in debt, and will have some $10 million in assets to divide up for the estate after the sale of the hospital and the nursing home.
Among those in the scramble for the dollars will be a host of attorneys who have worked on the case for a number of months. Most of those attorneys are from Atlanta, where the bulk of the bankruptcy case was heard.