News and Tribune

Recent Local News

June 1, 2012

$40M deal done to help medical center

Construction would be completed as Clarksville hospital expected to emerge from bankruptcy

CLARKSVILLE —  Kentuckiana Medical Center has finalized a deal with Michigan-based health care investors Granger Group.

Dr. Eli Hallal, a key local investor in the hospital, said the plan will be enough to finish construction of the hospital and take it out of bankruptcy. The financial restructuring plan is valued at about $40 million, according to Granger Group. It was accepted this week by United States Bankruptcy Court Southern District of New Albany.

Kentuckiana Medical Center, which employs close to 200 people, is located just off U.S. 31 in Clarksville. It opened in 2009 and has remained in business as officials have attempted to restructure debt after filing for Chapter 11 bankruptcy protection in September 2010.

Earlier this year, government-backed land deals had been discussed as a means of rescuing the hospital from bankruptcy. That talked slowed down after the Clark County Commissioners and the Clarksville Town Council each rejected such proposals.

“I think it’s very good they were able to resolve the issue within the private sector,” said Clarksville Town Council President John Gilkey upon receiving news of the Granger deal. “We’re looking forward to working with them on the development.”

In lieu of an interview, Granger issued a press release after a reporter called Friday afternoon.

The release said the company began meeting with leadership at the medical center in January.

“The plan, as approved yesterday in court, will allow [Kentuckiana Medical Center] to continue serving the surrounding community with quality of care that outperforms other hospitals in the area,” the release said. “The story behind KMC’s physicians and staff spurred Granger Group’s passion to provide a structure that will allow KMC to continue to serve its patients and deliver the high-quality of care that is expected in the health care industry.”

The release goes on to say that Granger, through a newly formed entity, will assume the management responsibilities of the hospital’s operations.

Kentuckiana Medical Center is a partnership of CHA, a hospital development company based in Wichita, Kan., and Kentuckiana Investors, a group of 33 local physicians. The one-story, 76,000-square-foot complex was to be a $46 million construction project when it got started. However, Hallal has said economic turbulence in 2008 and 2009 kept the hospital under capitalized, and therefore, unfinished when it was started.

First Tennessee Bank, one of its creditors, froze its assets in September 2010, which precipitated the hospital’s chapter 11 bankruptcy filing. Chapter 11 bankruptcy protection provides for reorganization while a business stays open and pays creditors over time.

Granger’s release said that in the next four months more than $10 million of new capital will be invested in the hospital to meet the requirements of the bankruptcy plan.

“It would have been easy to throw in the towel and walk away,” Hallal said Friday.

That didn’t happen because the physicians who’d invested in it knew it was “a good project.”

Though the government-backed deals were rejected, the hospital is not without some public investment. Clarksville invested about $1.2 million in infrastructure improvements around the hospital, including roads, curbing and even a $41,000 storage tank to handle waste from the hospital’s decontamination room.

David M. Cantor, Kentuckiana Medical Center’s attorney through the bankruptcy process, was called for this story but could not be reached by press time.

1
Text Only | Photo Reprints
Recent Local News
LOCAL MAGAZINES
2013 Photos of the year


Take a look at our most memorable photos from 2013.

SPECIAL CONTENT
Twitter Updates
Follow us on twitter
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
AP Video
Obama Hopeful on Ukraine, Will Watch Russians Flamingo Frenzy Ahead of Zoo Construction Crew Criticized Over Handling of Ferry Disaster Agreement Reached to Calm Ukraine Tensions Raw: Pope Francis Performs Pre-easter Ritual Raw: Bulgarian Monastery Dyes 5000 Easter Eggs Diplomats Reach Deal to Ease Tensions in Ukraine U.S. Sending Nonlethal Aid to Ukraine Military Holder: Americans Stand With KC Mourners Obama Greets Wounded Warriors Malaysia Plane: Ocean Floor Images 'Very Clear' Sparks Fly With Derulo and Jordin on New Album Franco Leads Star-studded Broadway Cast Raw: Two Lucky Kids Get Ride in Popemobile Boston Bombing Survivors One Year Later Sister of Slain MIT Officer Reflects on Bombing
2013 Photos of the year


Take a look at our most memorable photos from 2013.