Hospital bankruptcy bill signed by governor; NRMC officials plan Jackson trip for meeting

Published 12:13 am Thursday, March 6, 2014

NATCHEZ — The bill that will allow Natchez Regional Medical Center to declare Chapter 9 bankruptcy has left the governor’s desk, clearing the way for the county-owned hospital to proceed with the appropriate court filings.

According to the state legislature’s website, Gov. Phil Bryant signed the bill Tuesday afternoon.

Because the hospital is county-owned, declaring bankruptcy requires legislative approval. NRMC officials sought permission to file for bankruptcy last month, saying the hospital faced at the time $3 million more in financial liabilities than it had in assets.

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The bill, as passed, reads, “The Board of Trustees of Natchez Regional Medical Center, a public community hospital located in Adams County, Mississippi, and created by the Board of Supervisors of Adams County … is authorized, in its discretion, to petition for relief from debts and financial obligations of the hospital under Chapter 9 of Title 11, United States Code, and to take any actions that the hospital board of trustees determines may be necessary for such purpose.”

All of the area’s legislative delegation voted for the measure, except Sen. Melanie Sojourner, R-Natchez, who was recorded as being one of the eight legislators who were absent or not voting on the measure.

The Rev. Leroy White, chairman of NRMC’s board of trustees, said he plans to go to Jackson today to meet with the bankruptcy attorney, Eileen Shaffer, who also worked with the hospital during its 2009 bankruptcy.

“Last time, she did an outstanding job, and that is why we got her again,” White said.

NRMC’s attorney, Walter Brown, said the trustees will meet with the county board of supervisors Tuesday to update them on the process.

“We need to sit down with the board of supervisors to go over the plan and make sure we are all in agreement about the process,” he said. “It is not a supervisors’ matter, but the board (of trustees) has tried to keep the supervisors appraised of what is going on.”

Brown said the hospital has been gathering information for the filing for several weeks.

“That is a rather time consuming effort that involves a number of people, and you have to have everything done on the front end so that you have your plan of how you are going to proceed and operate during the bankruptcy,” he said. “The court wants to see that, and the creditors want to see that. You file most of your documentation with the petition in order to have a complete picture before the court.”

Supervisor Mike Lazarus said he had heard news of the governor’s signature on the bankruptcy bill, but the sale of the hospital “is first and foremost” on his mind.

Lazarus said he is also waiting for NRMC’s administration to provide financial information he and other supervisors have requested.

“There is no way the supervisors can approve any kind of sale until we get some kind of finances on the hospital,” he said. “Hopefully, they are getting something together for us.”

In previous communications with the supervisors, Brown has said the financial information will be available in the bankruptcy filing.

Brown said Wednesday the hospital will request the court grant a “debtor in possession” status to NRMC, which will allow the current administration to remain in place throughout the process.

“If the court appoints somebody from the outside, it can be very expensive,” he said.

NRMC opened in 1960 as Jefferson Davis Memorial Hospital. Its $2.4 million construction was underwritten by an $800,000 local contribution and state and federal funds.

It has been financially independent since 1974 and does not receive tax support, but is backed by a 5-mill standby tax that the Mississippi Development Bank required the hospital to get in 2006 when it asked for the MDB to reissue its revenue bond.

The county supervisors, who have to approve any action to sell the facility, appoint the hospital’s volunteer trustees. The board of trustees includes White, John Serafin, Dr. Linda Godley, Bill Ernst, Lionel Stepter, Lee Martin and Dr. Jennifer Russ.