Articles Tagged: Bankruptcies

With bankrupt Mercy Iowa City and its former managing affiliate MercyOne snared in a growing web of legal disputes, the Des Moines-based affiliate is accusing Mercy Iowa City of being too verbose in its arguments, demanding case dismissal.

The turmoil arrives amid Publishers Clearing House’s ongoing bankruptcy process.

A committee representing the bankrupt Mercy Iowa City has filed a complaint against its former managing partner MercyOne – along with the president it appointed to lead the community hospital – in hopes of recovering at least $55 million for alleged “breach of contract, unjust enrichment, breach of fiduciary duty, and negligent misrepresentation.”

In both defense and attack mode as a lawsuit against it looms, MercyOne has asked a higher court to weigh in on the recent dismissal of its appeal of Mercy Iowa City’s bankruptcy liquidation plan while also denying the defunct hospital documents it wants for any lawsuit it files against MercyOne.

Although MercyOne for nearly two years has criticized a bankrupt Mercy Iowa City for not paying its outstanding $31,524 bill -- citing that debt repeatedly as grounds to fight Mercy’s liquidation plan and demand thousands of documents and emails -- MercyOne now is refusing the hospital’s payment.

In seeking its own batch of records from a bankrupt Mercy Iowa City — which last week won a court order for voluminous documents in its ongoing liquidation battle — the community hospital’s former managing affiliate MercyOne is airing new details about backroom discussions, discord, and deals that precipitated Mercy Iowa City’s downfall.

The state’s grain indemnity fund will pay farmers 90 percent of their loss, up to $300,000. The fund was established by the Iowa Legislature in 1986 and accrues via a per-bushel fee on purchased grain and fees on licensed warehouses and grain dealers.

A federal judge this week ordered MercyOne to produce a long list of records associated with its six-year management of the bankrupt Mercy Iowa City after a committee overseeing the hospital’s liquidation accused the former managing partner of withholding documents and details about what led to Mercy Iowa City’s “swift financial decline.”

In Eastern Iowa, Joann has operated stores in in Cedar Rapids, Iowa City, Waterloo, Dubuque, Davenport and Muscatine.

A Decorah farmer is accused of stealing enough corn and soybeans to fill nearly 25 semi-trailer trucks, worth over an estimated $175,000, and shielding the income from an ongoing bankruptcy case, Winneshiek County authorities say.

With the bankruptcy case of Iowa City’s only community hospital winding down – and tens of millions in liquidated assets already distributed to bondholders – attorneys, consultants, and other professionals still are fighting for their cut, with fee applications topping $13 million.

In arguing its appeal of a Mercy Iowa City liquidation plan that releases thousands of people and entities from potential lawsuits tied to the community hospital’s demise, its former manager MercyOne said a judge erred and overstepped in confirming the plan.

In the days since Mercy Iowa City’s bondholders raised concerns about dwindling assets available for distribution through a liquidation trust, attorneys, consultants, and advisers for the bankrupt hospital, its creditors, and its pensioners have inundated the court with “final” fee requests totaling nearly $13.4 million.

Three days after asking a judge to get involved in the delayed distribution of Mercy Iowa City’s liquidated assets -- accusing the bankrupt hospital’s management team of poor communication and miscalculation in stalling payments -- Mercy’s bondholders last week finally got back some of the long-sought $62.8 million they’re owed.

Nearly two months after a bankruptcy judge confirmed a liquidation plan for the former Mercy Iowa City’s tens of millions in assets, and more than a month after that plan went into effect, secured bondholders “have yet to receive a single ‘effective date’ distribution.”