The Texas-investment firm that sought to take over Mercy Hospital in Iowa City is now asking the court to appoint an examiner to investigate the hospital's bankruptcy filings ahead of its sale to the University of Iowa, the Des Moines Register reported. Preston Hollow Community Capital, a major investor in the 194-bed Iowa City hospital, called into question the hospital's plans to liquidate through a bankruptcy fire sale process to the university health system for $20 million. In court filings this week, the Dallas-based company accused Mercy Iowa City leadership of mismanagement, leading to the hospital's "financial freefall" in recent years. As a result, Preston Hollow Community Capital asked the court to approve "a comprehensive financial and legal review" of the hospital, its board of directors, its former managing partner MercyOne and its other partners, including Allscripts Healthcare Solutions, an electronic health records vendor. "In order to achieve that outcome, Preston Hollow Community Capital has requested the court appoint an examiner in line with longstanding provisions of the U.S. Bankruptcy Code," the company said in a statement. "This step will help maximize financial recovery for all creditors, including the pensions of hospital employees and retirees, while at the same time ensuring the sale process is fair and accurately reflects the hospital’s overall value to the community." Mercy Iowa City officials disputed the allegations made by the investment firm in a statement this week. Read more.
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