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  • Last modified 273 days ago (Jan. 23, 2019)

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Hillsboro hospital in receivership

Staff writer

Temporary administrators for Hillsboro Community Hospital are going through records and shaking their heads, Hillsboro city administrator Larry Paine said Tuesday.

A Friday court ruling put the hospital under management of Shawnee, Oklahoma-based Cohesive Healthcare Management + Consulting.

Geary County district judge Ryan Rosauer’s ruling came after an ex-parte hearing with lawyers for Bank of Hays and the City of Hillsboro. Both parties filed a joint motion late Thursday afternoon asking that Cohesive be appointed receiver.

Rosauer wrote in his order “this court specifically finds that immediate and irreparable harm is likely to result if a receiver is not appointed to operate and manage the Hillsboro Hospital in order to ensure that it remains open and retains as much of its value as possible.”

Bank of Hays filed a mortgage foreclosure lawsuit against the hospital Jan. 8 seeking the hospital be sold at a sheriff’s sale, with property taxes to be paid first and the bank’s $9.8 million mortgage paid second. Hillsboro and its Public Building Commission are among 11 codefendants in the lawsuit.

According to the application for appointment of a receiver, the hospital building and its property are worth an estimated $12 million; its annual revenue is estimated at $8.8 million; and its net income is estimated at $192,747.

The application states the hospital owes $276,477.63 mortgage payments for the months of September through December; it owes $29,650 to the city of Hillsboro for monthly sublease payments due in October through January; the hospital “narrowly averted” utility shut-off Jan. 11; the hospital owes more than $300,000 in property taxes; the hospital has not paid facility insurance, causing the bank to have to pay it; payroll has not been consistent; and withholding taxes have not been paid to the state.

Paine said Friday he is satisfied with the court order.

“It assures the hospital will remain under competent operators and open while the legal process continues,” Paine said.

Mayor Lou Thurston is also pleased with the ruling.

“It is the city’s ongoing desire to undertake reasonable steps to assist in keeping the hospital open during the bank’s foreclosure lawsuit, and securing the appointment of an outside, disinterested receiver to operate and manage the hospital on an interim basis is a critical step in this regard,” Thurston said. “The city is pleased Cohesive was ready, willing, and able to step in to assist the hospital with this challenge, and the city looks forward to a healthy working relationship with Cohesive going forward.”

Last modified Jan. 23, 2019

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