Tenet Healthcare Corp. last week regained an Arizona hospital it once tried to shut down, and this time it plans to foreclose on the facility.
The center of this story is 80-bed Tucson General Hospital. A group of local clinic operators, Tucson Clinical Care, bought the hospital in late 1999 from Tenet, which planned to shut down the facility because of years of losses and the company's strategy to exit Arizona.
In less than a year, Tucson Clinical Care filed for Chapter 11 bankruptcy protection, minutes before the local electric utility was to cut off its power because of unpaid bills. Tucson Clinical Care's owner, local nursing home operator Mark Yampol, had paid Tenet just $1.3 million of the facility's $8.8 million purchase price, according to the Arizona Daily Star.
A federal bankruptcy court order will allow Santa Barbara, Calif.-based Tenet to foreclose on the facility. Ruling that Tucson Clinical Care could not remain financially viable and reorganize, U.S. Bankruptcy Court Judge James Marlar, in Tucson, ordered that the company's Chapter 11 filing be converted to a Chapter 7 liquidation. He gave the bankruptcy trustees until April 23 to sell equipment and other assets inside the hospital.
The Arizona Department of Health Services took the unprecedented move last week of ordering the hospital to halt almost all patient care. Employees were in danger of going unpaid, and the hospital had been borrowing pharmaceuticals from other facilities for the previous two months, according to health department officials. The hospital has not resumed operations.
Tenet officials said they intend to foreclose on the property within a week to 10 days and are talking to potential buyers.