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By Liora Engel-Smith
An eastern North Carolina hospital that’s entangled in bankruptcy proceedings remains in limbo, despite plans to have it sold by the end of January, court documents show.
A draft purchase agreement for Washington Regional Medical Center, a 25-bed facility in Plymouth, spells out that Affinity Health Partners, the company that currently manages the hospital, would buy the rural facility for $3.5 million. The agreement, filed with the United States Bankruptcy Court at the Eastern District of North Carolina, also stipulates that the Texas-based firm will invest more than $1 million in the hospital and make plans to replace Washington Regional’s aging facility following the purchase.
But as of Monday, Affinity had not yet signed the agreement. Affinity CEO Frank Avignone has not returned numerous phone calls and emails seeking comment on reasons for the delay.
Related story: Eastern North Carolina hospital to be sold to Texas firm
In court last month, Avignone said he was confident he’d have the funds to purchase the hospital by Jan. 31, though he did not provide the court with proof that he could or would make the purchase. Avignone said at the hearing that private investors who wished to remain anonymous would finance the purchase.
Washington Regional Purchase Agreement (PDF)
Washington Regional Purchase Agreement (Text)
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The hospital has been entangled in court proceedings since last February, when the current owner, HMC/CAH, filed for bankruptcy on it and several other rural hospitals out of state. The court appointed an attorney from Winston-Salem, Thomas Waldrep Jr., to oversee the properties through the proceedings. Waldrep, in turn, hired Affinity to manage Washington Regional.
In an email Monday, Waldrep said that Affinity needed more time to buy Washington Regional. He did not respond to a follow-up email seeking additional details on the reasons for the delay, but when asked about the likelihood of the sale going through by March, Waldrep said it is “likely.”
A local economic force in turmoil
Since bankruptcy proceedings began, Washington Regional and the economically depressed community it serves endured a temporary closure of the hospital and two missed payroll payments to more than 90 employees. At the time, Avignone blamed the lapse in payroll to a holdup with Medicare billing. He said the hospital made subsequent payroll payments on time.
The Plymouth hospital, which according to the purchase agreement owes Washington County more than $70,000 in property taxes as of January, is a major economic force in the rural community.
Washington County Manager Curtis Potter said on Monday that the county has yet to see proof that Affinity has the funds to purchase the hospital, which was owned by the county until 2007. The county, he previously said, has an interest in Washington Regional succeeding in private ownership. If the hospital closes, ownership of the building would revert to the county, and the public entity may not be able to support a fully functioning facility on its dime.
“I’m frustrated at the lack of information in terms of trying to figure out what the holdup is,” he said in a phone interview Monday.
But he added that the longer the delay drags on, he “begins to worry that this might actually not go through.”