A West Virginia hospital in the throes of bankruptcy proceedings has been given until June 18 to come up with its own reorganization plan before creditors can step in and do it instead.
Logan (W.Va.) General Hospital, a 132-bed not-for-profit, began missing payments last year on a $31 million bond issue and filed for Chapter 11 bankruptcy protection last October (Oct. 26, 1998, p. 30). The hospital originally had until May 3 to file its reorganization plan, but U.S. Bankruptcy Court Judge Ronald Pearson granted the hospital's request for a 45-day extension.
The hospital had asked for the extension to give it time to complete auctions on the Fountainplace Shopping Center-a Logan strip mall-and other property it owns.
"The hospital is liquidating all of its nonmedically related assets," said George Partain, its general counsel.
The strip mall is scheduled to be auctioned with sealed bids May 14, and auctions for all the hospital's 40 commercial and residential properties are scheduled for May 13-16, Partain said.
Partain said the hospital has already raised about $715,000 by auctioning construction equipment.
The mall is worth about $42 million, and offers of as much as $38 million have been made, he said. Hospital officials said they hope to get another $17.6 million from the real estate.
Logan General is carrying about $65.7 million in debt, including $29.7 million still owed to the Bank of New York, the trustee of the bond issue. The debt also includes $15 million in taxes, $3.1 million in penalties and interest on missed tax payments, $7 million in unpaid accounts, $3 million owed to Medicare and some smaller loans.
C. David Morrison, the hospital's former administrator, who stepped down at the end of last year, has also added to the hospital's woes.
In March, Morrison filed a lien for nearly $3.4 million against the Fountainplace Shopping Center for his part in managing the project.
Logan General is owned by Monterra Health System, which also owns Monterra Development Corp., a company that Morrison headed and that built the mall.
The hospital has filed a lawsuit to block the lien, and Morrison has filed a motion to dismiss the hospital's lawsuit.