Greater Southeast Community Hospital in Washington was on the brink of liquidation Friday as its executives scrambled to work out a last-second deal to sell the hospital.
The outcome of a hearing before a federal bankruptcy judge in Washington wasn't known at deadline. The hospital's creditors would not approve the sale of Greater Southeast, but the hospital had asked the court to let it stay open through Nov. 8.
The 262-bed hospital and its parent corporation, Greater Southeast Healthcare System, were under a previous court order to sell the hospital by Oct. 27 or face liquidation.
The court extended that deadline to Friday, when Greater Southeast was negotiating a sale to Doctors Community Healthcare Corp., a Scottsdale, Ariz.-based hospital chain.
Doctors Community, which owns 148-bed Hadley Memorial Hospital in Washington, backed away from a deal early last week because of a disagreement over the sales price. It had made an offer of $24 million.
Included in the sale would be Greater Southeast, the system's 37-bed Fort Washington (Md.) Hospital and two nursing homes.
Without more cash from a purchase, the struggling hospital would run out of money. It's $70 million in debt and sought Chapter 11 bankruptcy protection in May, staying alive for the past five months only through an $8.5 million loan from the District of Columbia government (May 31, p. 4). The district government has refused to extend it any more financial assistance.
The hospital, which is the only facility in the inner-city neighborhoods east of the Anacostia River, has faced a series of downgrades in its bond rating. Moody's Investors Services has reduced its rating on $46 million in outstanding bonds to Ca and has said a sale possibly is the best alternative for the hospital and its bondholders.
Greater Southeast's board includes Carolyn Lewis, chairwoman-elect of the American Hospital Association board.