Board can’t vote for bankruptcy yet

Published 12:16 am Tuesday, March 18, 2008

NATCHEZ — As the hospital’s bill allowing bankruptcy moves through the legislative process, hospital board members still are unable to officially vote to declare bankruptcy.

Hospital board attorney Walter Brown said the board can’t officially vote for bankruptcy until it has been approved by Gov. Haley Barbour.

On Monday members from the Natchez Regional Medical Center’s Board of Trustees, and board attorney Walter Brown, met with the Adams County Board of Supervisors, in executive session, for an update on the hospital.

Email newsletter signup

Brown said the meeting was an opportunity to answer questions from the supervisors and update them on hospital’s ongoing bankruptcy legislation.

On Friday the bill that would ultimately allow legislation was held on a motion to reconsider, essentially a technicality, and continued out of the Senate on Monday.

While the hospital board has not officially moved to declare bankruptcy as their next step they have already started the legislation that would allow it.

Should the hospital declare bankruptcy they would pursue chapter 9, specifically for municipalities, Brown said.

The hospital would still be held responsible to its debtors but would be able to have an extended period of time to pay them off.

In addition the chapter 9 declaration would allow the hospital to reexamine its already existing contractual obligations.

For instance, if the hospital had a lease on a piece of equipment, deemed too costly, they would have an opportunity to get out of the contract.

Brown said the hospital’s interim CEO Jim Richardson and other hospital administrators are currently examining all of the hospital’s contracts should the hospital go bankrupt.

“Taking chapter 9 is not the end of the world,” Brown said.

Jackson attorney Walter Newman, who specializes in bankruptcy, said chapter 9 would offer certain protection for the hospital.

“It allows an opportunity for reorganization,” he said.

Newman said if NRMC were to enter into bankruptcy they could not be sued nor could their creditors foreclose unless they filed through bankruptcy court.

Newman said the bankruptcy essentially allows the hospital a certain amount of breathing room.

And Brown has said that breathing room is exactly what the hospital needs to be able to make more long-term plans for the hospital’s future.

When the bankruptcy bill was before the Senate last week Sen. Brigs Hopson objected to allowing NRMC to declare bankruptcy saying it could negatively impact bond ratings across the state.

However Brown said statewide bond ratings would not be negatively impacted.

In fact, since NRMC’s bond has always been paid on time their bond would not be negatively impacted Brown said.