Frustrated creditors of Greater Southeast Community Hospital told a federal bankruptcy judge yesterday that they've given up hope anyone will ever buy the failing hospital and asked him to liquidate it now so they can recover some of the $70 million they are owed.
But during a hearing that ended last night, Greater Southeast officials persuaded the creditors to come up with enough cash to keep the hospital open until Monday morning so they can continue desperate negotiations with the only bidder, Arizona-based Doctors Community Healthcare Corp.
Both organizations told U.S. Bankruptcy Judge S. Martin Teel Jr. that they're certain they will work out a deal this weekend. On Wednesday, hospital officials thought they had a $39 million deal with Doctors to sell the 280-bed hospital and several other health facilities owned by Greater Southeast's parent firm. That agreement fell apart at the last minute.
Sources said the new offer is worth more than $30 million but contains provisions that the creditors object to--especially one that says that if the deal falls apart before closing in several months, Doctors Community would be treated as a secured creditor. That would strengthen its chances in later bankruptcy court proceedings of recovering money it invests now.
The hospital's cash reserves were down to $185,000 yesterday, and officials wanted the creditors to turn over an additional $500,000 immediately to keep Greater Southeast open while details are worked out. Teel didn't have to decide that issue last night. Creditors agreed to release $150,000--enough to pay doctors, nurses, blood suppliers and other critical vendors so the hospital can stay afloat until Monday.
But it was clear last night that the creditors are running out of patience. "I wonder whether it's responsible to put acute-care patients into the hospital at this point," said Peter D. Isakoff, who represents a subsidiary of Daiwa Bank that says Greater Southeast owes it $12 million. "It's a very, very sad day, and we regret that we're at this point."