The U.S. Bankruptcy Court has become a familiar feeding ground for HealthMont, one of Nashville's newer for-profit hospital companies.
The company last week purchased its fifth hospital, 49-bed Callaway Community Hospital in Fulton, Mo., for $1.4 million from a not-for-profit company in the throes of a two-year bankruptcy proceeding.
HealthMont got its start in April when Brentwood, Tenn.-based New American Healthcare Corp. filed for bankruptcy protection. Two of New American's top executives decided to form their own company and bought four New American hospitals in August for $10.5 million at an auction held by the U.S. Bankruptcy Court in Nashville. As New American was liquidated, HealthMont was born.
For its fifth facility, HealthMont visited the U.S. Bankruptcy Court in Wilmington, Del. The court approved the sale, which is expected to be completed Jan. 1.
Timothy Hill, chief executive officer of HealthMont, said it is coincidence that all of HealthMont's hospitals have come from bankrupt companies.
"We're not looking for distressed or bankrupt properties," he said, "although we do know how to deal with bankruptcy."
Callaway Community is one of four hospitals owned by CHAMA, a not-for-profit corporation that filed for Chapter 11 bankruptcy protection in October 1998 (April 19, 1999, p. 74). One of CHAMA's other hospitals, 49-bed Medical Center of Winnie (Texas), closed in February.
A private, for-profit company called Community Healthcare Partnerships in Davenport, Iowa, has bid $3.5 million plus assumption of debt to buy the other two: 48-bed Colusa (Calif.) Community Hospital and 92-bed Southeast Arizona Medical Center, Douglas, Ariz.
The court has approved the two-hospital deal, and it should be completed shortly, said Michael Tarsatana, manager of Partners for Corporate Renewal, a turnaround firm helping CHAMA with the bankruptcy proceedings.