The fate of Greater Southeast Community Hospital in the District of Columbia hung in the balance for a second consecutive week last week as lawyers for the bankrupt hospital, its creditors and its suitor haggled over a deal.
At issue is a $21 million offer from Doctors Community Healthcare Corp., a Scottsdale, Ariz.-based chain, to buy the 262-bed hospital.
The U.S. bankruptcy court extended several deadlines last week, even convening on the Veteran's Day holiday, although no resolution had been reached at deadline.
Lawyers were back in court Friday afternoon, although many questioned whether the court would further extend the deadline.
Without a purchase deal, the hospital faces liquidation. The hospital's creditors are split; those that hold unsecured municipal bond debt oppose the deal.
Greater Southeast is the only full-service hospital serving the inner-city neighborhoods east of the Anacostia River. Doctors Community also owns 148-bed Hadley Memorial Hospital, which is about two miles from Greater Southeast but offers fewer services.
Greater Southeast is $70 million in debt. It sought Chapter 11 bankruptcy protection in May in return for $8.5 million in aid from the District of Columbia government (May 31, p. 4). The district has said it will not extend more aid to the hospital.
Meanwhile, a flurry of bond downgrades has all but cut off the hospital's access to capital. Moody's Investors Services has dropped its ratings on $46 million in outstanding bonds to Ca and has said the best option for the hospital and its bondholders may be to sell the facility.
The district government is standing by with an $800,000 contingency plan to evacuate Greater Southeast's patients within 48 hours if liquidation occurs. The plan calls for transporting all of Greater Southeast's patients by ambulance to 11 of the district's 16 hospitals.