Articles Tagged: Mercy Iowa City

Although Mercy Iowa City wants an expeditious sale of its assets – after the 150-year-old hospital filed for Chapter 11 bankruptcy this month – its bondholders and creditors this week asked a judge to tap the brakes to give them time for due diligence and to maximize the “value of the sale.”

Although Mercy Iowa City has signed a letter of intent to sell most of its assets to the University of Iowa for $20 million, a review of assessment records show the 150-year-old community hospital’s 19 properties – all of which are intended for UI – are valued at more than $137.3 million.

Accusing Mercy Iowa City Hospital of misdirecting blame for its “prolonged, observed deterioration over the course of several years” that brought it to “being liquidated through a bankruptcy fire sale process for a mere $20 million,” bondholders have asked a judge to appoint an examiner to answer several of its key questions.

Since leaving her job, Pattee has been receiving pension checks. But Mercy Iowa City’s decision last week to file for Chapter 11 bankruptcy and initiate a $20 million sale of its assets to the University of Iowa has her — and many other current and former Mercy employees like her — wondering whether and for how long that will continue.

In a letter updating its tens of thousands of patients on how this week’s news of Mercy Iowa City’s bankruptcy could affect them and their care, Steindler Orthopedic Clinic on Friday vowed to “remain independent” — even as the 150-year-old community hospital, and Steindler’s longtime partner, “will cease to exist.”

After considering Mercy Iowa City’s argument that it’s an increasingly “fragile organization” forced into an emergent bankruptcy filing after suffering “significant and negative destruction of value,” a U.S. bankruptcy judge on Wednesday agreed to expedite the timeline of the hospital’s sale – presumably to the University of Iowa – setting a bid deadline of Sept. 19.

The Board of Regents on Tuesday morning unanimously approved a University of Iowa request to buy most of Iowa City-based Mercy Hospital’s assets for $20 million — without asking any questions about the deal’s finances, including how they came to the $20 million figure, where that money will come from, and what will happen with the $63 million Mercy owes on publicly-issued bonds.

The University of Iowa has signed a letter of intent to acquire “substantially all the operating facilities and key assets of Mercy Iowa City — which has filed for bankruptcy — in hopes of ”preserving the continuity of care for patients and continuing opportunities for physicians and employees.“

In asking the court to dismiss the demand a receiver take control of Mercy – for a second time in the under two weeks since investor Preston Hollow Community Capital and master trustee Computershare Trust petitioned the court July 24 – hospital attorneys Thursday accused the plaintiffs of “insufficient service following deceptive and improper actions.”

A day after a Mercy Iowa City investor asked a Johnson County judge to appoint a receiver to take control of

Mercy Iowa City late Monday responded to a bondholder’s demand it be placed in a court-appointed receivership by disputing the arguments behind the receivership request and by calling into question the publicity tactics taken.

Asserting Iowa City’s 150-year-old Mercy Hospital is in “financial freefall” and headed toward closure, the investor and holder of $41.8 million Mercy borrowed in 2018 has asked a judge to “appoint a receiver on an emergency basis” to take operational control over the hospital facilities.

Adding to the lawsuits and settlements mounting for Mercy Iowa City and its affiliates is one filed earlier this year by the husband of a Mount Pleasant woman who died in April 2022 after making nearly 20 trips to various providers in a two-month span for what started as complaints of sinus pressure and earaches.

A month after Mercy Iowa City leadership named a new CEO, announced the hospital again would exit its partnership with Des Moines-based MercyOne, and disclosed the hire of an operations improvement consultant, executives last week shared more organizational updates – including that an “internal and external” rebranding is underway.

Given the uncertainty of Mercy Iowa City, Steindler now is considering performing surgery at hospitals in Cedar Rapids too – including UnityPoint Health-St. Luke’s Hospital and Mercy Medical Center, both Cedar Rapids, and other in-patient hospitals regionally.