For four hospitals owned by bankrupt Doctors Community Healthcare Corp., it's a case of meet the new boss -- he's the same as the old boss. Backed by a group of investors, Paul Tuft and Erich Mounce, who were the chairman and executive vice president, respectively, of Doctors Community, emerged as the successful bidders for the Scottsdale, Ariz., company's four hospitals in an auction that ended early this morning. With financing from Medline Industries, Mundelein, Ill., and Health Care REIT, Toledo, Ohio, Tuft and Mounce submitted the highest bid of $155 million that was approved by Doctors Community's court-appointed chief restructuring officer, Thomas Reardon, a lawyer with Epstein, Becker & Green, who is handling the sale of the bankrupt company's assets. The auction was conducted in the Washington office of Weil, Gotshal & Manges, which represents Doctors Community. Thomas Barry, a principal with New York-based investment banker Cain Brothers, said the deal is subject to approval by a U.S. bankruptcy judge in Washington, which he predicted would come in January or early February 2004.
Doctors Community filed for Chapter 11 protection from creditors in November 2002, two days after healthcare financing company National Century Financial Enterprises filed for Chapter 11 in U.S. Bankruptcy Court in Columbus, Ohio. NCFE, Dublin, Ohio, claimed that Doctors Community owed it more than $600 million. In a counter claim, Doctors Community charged that NCFE owed it $300 million. -- by Mark Taylor