A private Hammond, La., hospital built three years ago but never opened will be sold at auction in New Orleans early next month, according to court records.
La. hospital built years ago, but never opened, up for auction
Louisiana Hospital Center's facility was built in 2006 on property owned by the Hammond Area Economic and Industrial Development District. Construction was paid for through $15 million in bond financing and tax incentives.
The district had a lease with the 42-bed private hospital that required the facility's operators to repay the bond, plus pay the district an annual $145,000 administrative fee.
However, in 2007, the owners of Louisiana Hospital Center stopped paying the district and the bondholder.
Made up of a partnership among Tangipahoa and St. Tammany parish physicians, Cardiovascular Hospitals of America in Wichita, Kan., and other private investors, Louisiana Hospital Center's partners could never reach an agreement on how to run the hospital.
The bondholder, G.E. Commercial Finance Business Property Corp., of Bellevue, Wash., sued in the 21st Judicial District Court in Amite in March 2008 for return of its money.
In May 2009, partners in the hospital endeavor filed an involuntary Chapter 11 bankruptcy in U.S. Bankruptcy Court in New Orleans in an attempt to force a reorganization of the business.
Coort records show that the bankruptcy proceeding's outcome is an order signed by U.S. Bankruptcy Judge Jerry Brown to sell the hospital building and land at auction Dec. 9.
The proceeds from the sale will be used to repay first the development district and then G.E. Capital, said attorney Bill Babin, the trustee appointed in the case.
G.E. Capital has made an opening bid to credit the debt owned on the facility by $8.7 million in order to gain title to the property, Babin said. Other interested parties have until Dec. 7 to make offers with Babin, Babin said.
Jay Seale, a Hammond attorney representing the development district, said the bankruptcy sale is good news. The winning bidder must close within 20 days of Dec. 9, so the hospital could conceivably open next year, he said.
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