JEFFERSON — The Banks-Jackson-Commerce Medical Center has struggled in recent years with short- and long-term debts. But the facility may be bought by another health care provider, and also will get some help from Jackson County in dealing with its finances.
At Monday’s meeting, Jackson County attorney Julius Hulsey gave a report on the state of the hospital’s finances, which include about $1.5 million in long-term debt and about $2.5 million in short-term debt.
Bank of America previously issued bonds to the hospital, which is supposed to make bond payments along with Jackson and Banks counties. But Hulsey said there was an issue with the bond payments that needs to be addressed.
"In regard to that loan, there’s a technical default," he said. "The payments have been made; however, the debt coverage ratios have not been maintained as required by the bond documents."
"The bank is not calling it default, but
basically we have a technical default we have to address."
But Bank of America is willing to work with both counties and the hospital to clear up the issue.
"Bank of America is willing to extend the bonds without calling it into default through the first quarter of 2010, provided that the two counties agree to sign a guarantee creating a direct liability of the counties to Bank of America," Hulsey said. "In addition, if the counties were to issue a guarantee and a letter of credit, then they (the bank) would be willing to release their first lean on the collateral, which is a hospital authority property."
With the collateral freed up, the hospital would be able to "get the interim financing they’ve been asking us for," Commission Chairman Hunter Bicknell said.
Members of the hospital authority came before the commission in May to ask for the county’s help in consolidating and restructuring its debts.
The Jackson County Commission voted unanimously to give Bank of America both the guarantee and the letter of credit, which will cost Jackson County 1 percent of the $1.5 million in long-term debt — about $15,000.
Hulsey also said BJC may be bought by Restoration Healthcare LLC, a Tennessee-based health care company, in the coming weeks.
"They (the hospital) have a letter of intent from Restoration Healthcare to purchase the hospital and that has been reduced to an unsigned, written purchase agreement that is supposed to be submitted to the attorney general," Hulsey said. "Under the law, the attorney general has to approve any sale of a hospital and so they anticipate all of this is going to occur next week."
Hulsey also said the $15,000 from the county would be reimbursed if the hospital is sold.
"We would have a provision for the hospital authority that all expenses of the county be reimbursed from the proceeds of the sale after the first debts are paid," he said.