It took fewer than 20 minutes Tuesday for Hernando County commissioners to vote their support for a bankruptcy reorganization plan filed by Regional Healthcare Inc.
At a special meeting, commissioners unanimously approved a resolution that says they "vehemently oppose" a rival plan filed by Regional Healthcare's largest creditor, CNA Insurance Cos. of Chicago. CNA's plan "absolutely subverts" the non-profit mission of Regional Healthcare and violates the county's lease agreement with the health care company, according to the resolution.
"What happens (to Regional Healthcare) affects our community," said Commissioner Nancy Robinson. "Being community-based and not-for-profit are the principles that are important to our community."
Although it is uncertain whether any of the commissioners actually read either Regional Healthcare's or CNA's plan, they took a strong stand in support of the local health care system. That position was clearly appreciated by the eight Regional Healthcare board members who attended the meeting.
"It sends a pretty clear message that the county doesn't want their assets to be out of the control of local people," said Tom Barb, CEO of Regional Healthcare. "This tells CNA they're in for a battle."
For his part, CNA's lead attorney said he was surprised at the action.
"I'm surprised that the commission would take such an action without letting CNA make a presentation before them," CNA attorney William Smith said. "I'm also surprised in light of the obligations that the county has to CNA that they would do something like that."
The county has a stake in the ongoing bankruptcy talks because it has leased the Brooksville hospital to Regional Healthcare on a 50-year basis. Regional Healthcare, parent company of Brooksville Regional and Spring Hill Regional hospitals and PineBrook Regional Medical Center, has been under bankruptcy protection since 1993.
On Oct. 15, both Regional Healthcare and CNA filed reorganization plans with the court. Regional Healthcare's plan calls for all of its creditors' debt to be paid off with a certain amount of interest.
CNA's plan calls for all of the creditors except CNA to be paid, with interest. Instead of accepting payment now, CNA would take over the facilities and become the sole shareholder of Regional Healthcare. Not only would it be able to add or remove board members; CNA would be able to negotiate with outside hospital systems for the affiliation or sale of the company.
Both sides said they would bring up the county's resolution before the bankruptcy judge at Thursday's disclosure hearing. At that hearing, both Regional Healthcare and CNA will offer a number of objections to each other's plans. After the judge rules on those objections, the plans will be sent out to creditors for a vote.
Currently, both sides are expecting to return to court on Jan. 16 to argue over which plan received the most votes and will ultimately be confirmed by the court.