Massillon (Ohio) Community Hospital late last week halted a pending sale of its assets to a Columbia/HCA Corp. joint venture after Ohio Attorney General Betty Montgomery threatened to challenge the deal in court.
The 179-bed hospital also said it was reopening the bidding but would still consider an offer from Columbia.
Montgomery cited an "appearance of impropriety" because the former chairman of the hospital's board of trustees, Jerry Bowman, took a job as human resources director of Columbia's Ohio division.
The board accepted Bowman's resignation as chairman on May 23, 1996-the same day it approved the letter of intent to sell the hospital.
Peter Reibold, president of Columbia's Ohio division, said the company supports the hospital's decision to seek other bids, but he questioned the timing of the state's threat, noting that it coincides with pending legislation that would give the attorney general's office approval power over not-for-profit hospital sales.
Columbia-CSA, a for-profit joint venture of Columbia and the Cleveland-based Sisters of Charity of St. Augustine Health System, had agreed to establish a $22 million community foundation in exchange for Massillon Community's assets, the hospital said.
Separately, R.T. Jones Hospital in Canton, Ga., said it has selected Northside Hospital in Atlanta to be its joint owner and operator.
The two hospitals said they have entered exclusive negotiations for control of 84-bed, not-for-profit R.T. Jones. The hospitals said the final agreement will require Northside to contribute capital and other resources to R.T. Jones in exchange for a 50% ownership stake.
R.T. Jones has been looking for a strategic, long-term partner since mid-1995. Its search efforts intensified in January when talks broke down between its owner, the Hospital Authority of Cherokee County, and Nashville-based Columbia.