Emprise Bank didn’t know its effort to seize all property of the suddenly shuttered Herington Hospital would be challenged by an octogenarian crusader.
Robert Danzman, lying on a hospital bed Saturday at Hillsboro Community Hospital as he recovered from pneumonia and lung infection, recounted his unlikely path from being a frequent critic of Herington Hospital to assuming leadership of the board that is attempting to bring it back.
Three years ago, Danzman, as a Herington taxpayer, sued to block Herington Municipal Hospital from opening a medical clinic in Hillsboro because he saw the opening of the clinic as a misuse of Herington tax money and a possible misuse of COVID-19 funds from the federal government.
He now is suing to protect assets of the hospital despite his three years of questioning its management.
In that battle, he first filed suits against Herington Municipal Hospital and its reincarnation, Herington Hospital Inc. Now he has filed a motion to block a property seizure and sale.
When the hospital abruptly closed in early October, Danzman began his current crusade to get it reopened.
Danzman’s 2021 suit had been dismissed.
“They dismissed for lack of standing,” he said. “I was not party to the contract.”
That suit was based on the premise that the Herington hospital was supported by Herington tax money, and any losses incurred by the clinic in Hillsboro would fall on the shoulders of Herington residents.
Danzman’s next lawsuit wasn’t far behind his first. It was triggered by former hospital chief executive Isabel Schmedemann and chief financial officer Bryan Coffey persuading Herington City Council members to deed the hospital over to a board of directors apparently chosen by Schmedemann.
Instead of Herington Municipal Hospital, it became Herington Hospital Inc.
“A city can dispose of a hospital if they want to, but there are procedures they have to go through,” Danzman said.
Emprise Bank made three loans to the newly reorganized hospital in 2021 and 2022.
The loans were made despite the fact that hospital administrators and former board members were under investigation by the state attorney general and that a series of litigations were taking place, Danzman said.
After the hospital’s abrupt closure in October, Danzman contacted the hospital’s parent company, Amberwell Atchison, to get the company to follow through on its contractual obligation to appoint a new board of directors.
When the new board was appointed, Danzman was named chairman and managing director.
“That gave me standing,” he said.
Amberwell itself had lent Herington Hospital half a million dollars. The loan had a clause that if the hospital closed, it would become property of Amberwell.
Danzman and other new board members began looking into the circumstances of the sudden closure.
“That’s when we found out how bad things were,” Danzman said. “We told Emprise Bank we wanted the keys. That’s when we started looking through things.”
Medical records had been placed in shipping containers behind the hospital building. Large stacks of checks written to hospital creditors but never sent also were stored.
The shipping containers disappeared, repossessed by Chuck Henry Sales in Solomon.
“The containers are safe and sound,” Chuck Henry said in an email Monday. “They have not been opened and still have the hospital’s locks on as well as ours.”
Former hospital employees have suffered from the closure, Danzman said. One had to sell her truck to pay expenses. None can access their retirement accounts because Schmedemann and Coffey are trustees of the employees’ 401(k) accounts.
When employees were shown the door, everything was left running. Lights were on, equipment hummed, and it appeared as if everyone simply went to lunch, Danzman said.
Before a board was appointed, Danzman said, he met with the bank’s attorney, who told him the bank would cooperate with efforts to reopen the hospital.
“Part of the problem is that Emprise Bank took action that caused the hospital to close,” he said.
Lawyers for Emprise called for a meeting after the new board was appointed but said the bank was interested in pressing forward to collect what it was owed, Danzman said.
Board members knew that $270,000 to $300,000 was in two bank accounts.
Judge Courtney Boehm issued an order of garnishment Nov. 27 not to exceed $2.13 million for money in First National Bank of Hope and Commerce Bank of Wichita.
Emprise sent people Oct. 9 to inventory and appraise hospital equipment.
Court records show that the appraisal estimated the value of the property at $1,364,815.
If Emprise auctions off the contents, Danzman fears, scrappers will show up and pay pennies on the dollar.
“They have not told us how they want to do it,” he said.
Schmedemann has a troubled professional history, having been executive director of a hospital in Fulton, Missouri, that was part of a group of hospitals investigated by federal agents for fraud. Some hospital officials were ultimately convicted and sentenced to prison.
“I never understood why the board of trustees hired her,” Danzman said.
She left the Herington hospital in May or June, and an interim chief officer was appointed in June.
Schmedemann now is an instructor and program consultant at Kansas State University.
Coffey likewise had a troubled professional history. Formerly chief executive of Hamilton County Hospital, he was fired in 2015 over “financial anomalies.”
EmpowerHMS, the company that operated HCH before it was put into receivership two years ago after not paying bills, was the same company that operated the hospital at Fulton where Schmedemann was chief executive. Ultimately HCH declared bankruptcy.