Hospital Now Faces a More Complicated Path Towards A Reopening

Two events occurred last week which “have complicated the path” of a potential reopening of St. Mark’s Medical Center.

According to Dudley Piland, Chairman of the St. Mark’s Board of Directors, Mississippi-based Progressive Health Group has pivoted from its original plan on how it was planning to acquire the financially-struggling La Grange hospital, which closed Oct. 12.

As a result of that pivot, the hospital’s lender, Lument, has filed a mortgage insurance claim, which starts the chain of events that will ultimately lead to the sale of the hospital.

“These events have set us on a course where HUD (The Department of Housing and Urban Development) will own the note after they pay Lument,” Piland said. “HUD will sell the note to offset the cost of paying off the mortgage. PHG will certainly have an opportunity to participate in the note sale process, but there are other parties that have shown significant interest.”

Here’s more from Piland, describing the events of last week.

“Progressive Healthcare Group (PHG) of Mississippi informed Lument, the mortgage holder, and St. Mark’s Medical Center (SMMC) that they will not file the Transfer of Physical Assets (TPA) to take over control of SMMC as they had previously intended and stated as recently as the prior week. PHG further indicated they will try to acquire the asset at a price less than what is currently owed on the HUD guaranteed mortgage. Lument explained that this can only occur once HUD becomes the mortgage holder as neither Lument nor SMMC is currently in a position to accept any offer that does not assume the mortgage through the TPA process or pay off the mortgage.

“As a result of this turn of events, Lument has filed a mortgage insurance claim with HUD. That claim initiates a process that will begin with HUD paying Lument’s claim at which time HUD becomes the mortgage holder. That will open the door for PHG and other interested parties to make binding proposals to purchase the note which HUD will sell to offset the cost of paying off the mortgage. The entity that purchases the note would then have the opportunity to foreclose on the note and take possession of the asset. While the timing and process for the note sale are unclear at this time, HUD anticipates that the note sale should be completed sometime late this summer.”

So what does this all mean for a potential hospital reopening?

“Time will tell how the events of this past week will ultimately impact the future of St. Mark’s Medical Center,” Piland said. “If nothing else, those events have certainly complicated the path to determine the ultimate outcome of the SMMC saga.”