Clinic sued for $1.9 million

By PHYLLIS ZORN

Staff writer

A bank that holds a mortgage lien and that granted loans to Herington Hospital for its Hillsboro clinic filed suit Oct. 9 in Marion County District Court against the hospital seeking more than $1.9 million plus interest and foreclosure of the mortgage, with the property to be sold at a sheriff’s sale.

The hospital closed last week, and its clinic closed the week before.

Emprise Bank also named hospital owner Amberwell Atchison Association, pharmaceutical distributor Amerisourcebergen Drug Corp., business lender First Business Specialty Finance, GE Healthcare Financial Services, and ASD Specialty Healthcare, a supplier of oncology and supportive care products that is part of Amerisourcebergen, in its suit.

In Count 1 of the suit, Emprise claims a business loan was signed Dec. 29, 2021. The original loan was $1,451,000 with interest at 3.75%. In May, 2022, the bank and the hospital changed the terms of the loan, extending it four additional months.

The hospital defaulted by not repaying the loan and not providing annual audit reports to the bank, the suit says.

For that loan, the bank seeks $976,468.33 plus $100.07½ in interest per day until the loan is paid.

In Count 2, the bank claims the hospital took out a second loan for $876,000 on Dec. 29, 2021. The bank claims the hospital failed to repay that loan as well and did not provide audit statements.

For that loan, the bank seeks $417,723.07 plus $42.82 in interest per day until the loan is paid.

In Count 3, the bank claims the hospital took out a $500,000 loan on June 12, 2023. The bank claims no payments have been made and seeks $504,931.50 and $123.29 per day until the loan is paid.

In Count 4, the bank seeks foreclosure of a mortgage on the hospital’s Hillsboro clinic at 108 S. Main St. because a mortgage lien was used as collateral for the loans.

The hospital seeks to have the building sold at a sheriff’s sale with proceeds to be paid to real estate taxes owed and then to the bank.

In Count 5, the bank seeks all business collateral including inventory, chattel paper, accounts, and equipment, including a CT scanner and an ultrasound imaging system.

In Count 6, the bank seeks attorney fees, expenses, and interest.

Two other recent cases filed against the hospital in Dickinson County District Court include a tax warrant for $12,041.91 in unpaid withholding taxes and a mechanic’s lien by Iserve, Inc. for unpaid maintenance services.

Summons for the hospital in the Emprise Bank suit was ordered to be served on a manager or officer at the hospital because the hospital failed to maintain a resident agent.