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Hillsboro hospital owner to appeal receivership decision

Staff writer

A court ruling that put Hillsboro Community Hospital into receivership will be challenged by the company believed to own the hospital.

CAH Acquisition Company #5, one of 11 codefendants in a mortgage foreclosure lawsuit filed Jan. 8 by Bank of Hays, filed notice in the case last week that it will appeal a Jan. 18 ex-parte decision to the Kansas Court of Appeals.

It also filed a request for more time to answer the bank’s petition for foreclosure.

Thomas Gilman, with Hinkle Law Firm in Wichita, wrote on behalf of CAH that the company was not served papers in the lawsuit until Jan. 17, one day before Geary County district judge Ryan Rosauer assigned Oklahoma-based Cohesive Healthcare Management and Consulting as receivers.

Gilman requested also the deadline for CAH to answer to the lawsuit be extended until Feb. 21.

Gilman said the appeal will not stop proceedings in district court.

“My position will be that there will be other issues that will come before the district court,” Gilman said.

Bank of Hays’s foreclosure lawsuit seeks the hospital be sold at a sheriff’s sale, with property taxes to be paid first and the bank’s $9.8 million mortgage paid second.

The hospital building and its property are worth an estimated $12 million; its annual revenue is estimated at $8.8 million; and its net income is estimated at $192,747.

The application for receivership, jointly filed by the bank and the city of Hillsboro, states the hospital owes $276,477.63 mortgage payments for the months of September through December; $29,650 to the city of Hillsboro for monthly sublease payments due October through January; it “narrowly averted” utility shut-off Jan. 11; it owes more than $300,000 in property taxes; and it has not paid facility insurance, causing the bank to have to pay it; payroll has not been consistent; and withholding taxes have not been paid to the state.

Last modified Feb. 7, 2019

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