The struggling Banks Jackson Commerce Medical Center may have found a buyer to help alleviate some of its debts.
BJC administrators recently announced submitting a letter of intent with Restoration Healthcare, a hospital operator based in Tennessee.
"The letter of intent outlines the terms of the deal. During that period, it allows Restoration Healthcare the opportunity to conduct its own internal review of (BJC)," said Ken Conner, a principal with Decosimo CPA Firm, who is acting as an adviser to the Commerce hospital. "During the letter of intent stage, (BJC) is not allowed to comment on the specifics of the deal or talk with (other potential buyers)."
According to Conner, the letter of intent period generally lasts for at least 60 days.
After it acquires medical facilities, Restoration Healthcare operates each hospital "locally in a joint venture with the local and regional physicians."
BJC has a troubled financial past. In December, the hospital had to close its maternity ward because there weren’t enough paying patients to support the staff. Revenue from operations has also been down since the hospital lost a surgeon last summer.
Although BJC administrators would like to upgrade the 1960s hospital to attract more doctors, a lack of funding has prevented that project from getting off the ground.
"After a long search, the board believes that we have found in Restoration Healthcare a committed community partner and a management team that understands how to fully develop a hospital that is devoted to making quality care available locally," BJC Chairman Charles Blair wrote in a prepared statement.
"I had the opportunity to talk with a former board chairman of one of the other Restoration hospitals that recently went through this transition and they are very pleased with the improvements, quality health care services and community commitment Restoration Healthcare has delivered since they assumed leadership of their local hospital."
This is the second potential buyer the cash-strapped BJC has had. In 2008, Doctors Hospital of Georgia was planning to buy the facility, but after reviewing the hospital’s finances, it backed out of the deal in January of this year.
"Restoration Hospital is not bound by the letter of intent to follow through with the deal, nor is BJC bound to accept the offer," said Conner. "However, both parties entered into the (letter of intent) with the intention of completing the transaction."
Should both parties move forward with the deal, a formal agreement must be drafted and approved by the state attorney general. Both groups expect to close the deal this fall.
Proceeds from the sale first would be used to cover outstanding debts, with the remainder placed in a trust.