HCH bankruptcy proves costly
The $4,118 legal bill paid by the city of Hillsboro Tuesday is only a spit in a bucket of money the city has paid since a court battle over a hospital bankruptcy began in January.
Bank of Hays in January filed a petition for mortgage foreclosure against Hillsboro Community Hospital and seven co-defendants including the city and its Public Building Commission.
The bank is seeking a court order that the sheriff sell the hospital building and its contents, then distribute the proceeds first to Marion County to cover $322,322 in unpaid property taxes, and next to Bank of Hays toward more than $9.8 million owed on the mortgage, interest, and costs of the lawsuit.
An amended petition filed soon afterward added three more defendants.
To date, the city has spent $52,839 for legal bills coming from their own lawyer and a lawyer for Security Bank of Kansas City, trustee for a taxable revenue bond covering the property.
The bills first started coming in March with a $21,911 bill from the city’s law firm Triplett, Woolf, Garretson. The next highest bill was $10,240, due in June. Other bills have amounted to $715, $2,528, $4,692, and $8,735.
A January court ruling put the hospital in receivership by Oklahoma-based Cohesive Healthcare Management and Consulting. In March, Cohesive filed for Chapter 11 bankruptcy protection.
Last modified Aug. 7, 2019