NATCHEZ — Natchez Regional’s sale and bankruptcy proceeding racked up approximately $1.6 million in professional fees by mid-August, internal hospital records indicate.

A document obtained last week that was circulated at a recent Natchez Regional Medical Center Board of Trustees meeting detailed $1,576,300.14 in professional fees from mid-2013 through Aug. 11.

The list of professional fees was referenced last week at an Adams County Board of Supervisors’ meeting when supervisor Mike Lazarus openly complained over the high fees he alleged sales consultant firm Healthcare Management Partners had charged the bankrupt county owned hospital after it filed bankruptcy in March.

Scott Phillips, managing director of HMP, denied that his firm had charged the hospital more than $700,000 since the bankruptcy filing.

The hospital’s internal document along with partial invoices from HMP shows HMP’s total charges to the hospital since June 2013 total $730,198.84. That figure includes more than $583,000 charged to the hospital for serving as its sales consultant.

Other professionals listed on the document include:

• Butler Snow law firm: $408,924.29.

• The Horne Group: $152,247.46.

• Eileen Shaffer, NRMC’s lead bankruptcy attorney: $103,156.23.

• Walter Brown, NRMC’s board attorney: $99,674.54.

In addition to the $583,440.14 paid to HMP for handling the sales process, HMP has been also paid approximately $146,000 for its financial consulting services before and during the bankruptcy process, including approximately $92,000 charged for services after the bankruptcy filing.

Lazarus said his comments came after simply being frustrated by the high fees being charged to the hospital.

“I’m frustrated by all these expenses when we have employees out there suffering,” Lazarus said. “Everybody is getting rich off the employees and the hospital. Some of these people are making so much money that I could retire on.

“If the numbers aren’t post petition (after the bankruptcy was filed), I’m sorry that I was wrong,” Lazarus said. “But it doesn’t matter whether he was paid that amount in the last year or six months. I’m still frustrated by the amount of money we paid Mr. Phillips.”

Natchez Regional paid HMP more than $79,000 in two wire transfers two days prior to the hospital filing bankruptcy.

One day before filing bankruptcy, the hospital paid local attorney Walter Brown $123,272.44, a figure which conflicts with the hospital’s own document indicating professional fees paid.

The document circulated at the hospital board meeting in recent weeks showed Brown’s total payments as $99,674.54.

Phillips contended last week by email the last-minute payments were at his own advice in his role as financial advisor to the hospital.

The purpose, Phillips wrote, was to allow HMP and other professional firms (accountants and attorneys) remain as “disinterested parties” during the bankruptcy.

The theory being that a firm owed money by the bankrupt party may have their own self-interests in mind.

A noted bankruptcy attorney who did not want to be named said, “The disinterested test does not apply in the case of Natchez Regional Medical Center.”

U.S. Bankruptcy Code actually prohibits such professionals owed money prior to the bankruptcy from doing further work in bankruptcy cases filed under Chapter 11 of the code, but the hospital filed using Chapter 9.

Sec. 901 of the Chapter 9 code doesn’t include application of Sec. 327 that deals with the hiring of professionals to which Phillips seems to have referred.

The bankruptcy attorney said Phillips’ argument for paying himself was unfair to unsecured creditors.

“He chose to pay lawyers before the filing of the bankruptcy as opposed to paying creditors or making the PERS (retirement plan) funding.”