The Unsecured Creditors Committee of Hutcheson Medical Center is opposing a motion by U.S. Trustee Guy Gebhardt for a bankruptcy judge to dismiss the bankruptcy for the financially-ailing Fort Oglethorpe hospital.
Instead, the group is asking Judge Paul Bonapfel to appoint a trustee to oversee the Hutcheson finances.
In a 16-page motion, the committee said if the bankruptcy is thrown out "there are potentially grave consequences for the debtors' patients, employees and creditors."
The panel said a trustee "can oversee a responsible transition and implement a practical solution."
Trustee Gebhardt said Hutcheson has accumulated $5.5 million in new debt since going into bankruptcy 10 months ago and has not presented a reorganization plan.
The committee said the trustee could "monitor and control debtors' cash flow and administer the debtors' assets. . . The debtors have significant assets that can be used to pay creditors, provided that those assets are preserved and properly administered."
The group said the trustee "can guide the debtors toward a liquidity event that will maximize value for all parties."
The motion says Hutcheson has "significant assets, including real estate, a leasehold interest in the main hospital campus with 20 years remaining, licenses necessary to operate a hospital and nursing home in Georgia, accounts receivable, malpractice claims against former counsel, breach of duty claims against officers and directors, and other tangible and intangible assets. The committee believes that the debtors have enough assets to pay their administrative claims in full once all of the debtors' assets are administered. But if this case is dismissed, that opportunity may be lost."
The motion also says, "Were this case to be dismissed, the value of certain assets would likely evaporate. If the debtors were forced to hastily liquidate, creditors would be deprived of the going concern value of their operations, which is best preserved through an orderly asset sale process, which is well underway."
It says, "Case dismissal would be detrimental not only to creditors, but could also lead to serious consequences for other stakeholders such as patients, employees and the local community."
The motion says in a "shut-down scenario" that "they would be forced to incur millions of dollars in wind-down costs, and current patients and nursing home residents would be subject to diminished care and oversight."
It says the asset sale process is well underway and there are already multiple bidders on the nursing home.
The motion says at least one "qualified bidder" has expressed its intent to submit a bid on all of the hospital's assets.