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Bankruptcy Judge Gregory R. Schaaf authorized the sale of Nurses Registry and Home Health Corp. to a Louisiana company called LHC Group for $5.7 million, the Lexington (Ky.) Herald-Leader reported today. In an order authorizing the sale of the Lexington-based company, Judge Schaaf wrote that LHC Group's proposed purchase "is fair and reasonable, represents the highest and best offer for the purchased assets, and is in the best interests of the debtor, its creditors and its estate." Of the net sale proceeds, 70 percent will go to the U.S. government and 30 percent will go to the bankruptcy estate, according to an order approving the settlement agreement. Another company, Five Points Healthcare LLC in Atlanta, had submitted a bid of $3.5 million for Nurses Registry at a court-authorized auction, but its bid was not accepted. Based in Lafayette, La., LHC Group is a national provider of home health, hospice and comprehensive post-acute health care services.

Cardiac Science Corp., a manufacturer of automatic heart defibrillators, filed for chapter 11 protection to sell its business after a cash crunch threatened its ability to pay employees and vendors, Dow Jones Daily Bankruptcy Review reported today. The Wisconsin-based company headed to court yesterday to request immediate access to $4.98 million of the $9 million bankruptcy loan it negotiated with its current lender, a fund associated with Los Angeles-based Aurora Capital Group. Cardiac ultimately would like to execute an exchange deal with Aurora whereby the fund would repay $6.5 million in senior debt owed to HDFC Bank, and forgive the $9 million bankruptcy loan plus another $65 million owed to Aurora in exchange for ownership of the company. Cardiac has requested permission to test that offer during an auction on Dec. 17.

The U.S. Trustee's Office and Erlanger Health System are both raising numerous objections to a plan by bankruptcy trustee Ronald Glass to auction off the financially failing Hutcheson Medical Center, The Chattanoogan reported today. The Fort Oglethorpe, Tenn.-based hospital has laid off a number of additional employees since the auction plan was presented. Assistant U.S. Trustee Martin Ochs said, "If the nursing home assets are sold, but there is not a sale of the hospital facility without sufficient funds reserved from the sale proceeds, the trustee will be left with inadequate funds to operate the hospital." A hearing on the proposed auction is set for Wednesday morning in the bankruptcy court in Rome, Ga.

For more information on hospital and health care bankruptcies, be sure to pick up a copy of the ABI Health Care Insolvency Manual, Third Edition.

The trustee in the bankruptcy of Hutcheson Medical Center is asking a judge to authorize the sale of financially ailing Fort Oglethorpe Hospital at auction, the Chattanoogan reported today. Trustee Ronald Glass said there would be more value if the hospital is sold as a going concern (still operating) rather than it having closed due to mounting debt. He is proposing that bidders for the hospital and its assets, including a nursing home and a surgery center, be pre-qualified to determine that they have the financial ability to make the acquisition and the ability to operate the facility. There would be an auction date set that would be attended by only qualified bidders, the trustee, Regions Bank, the creditors’ committee and attorneys. The motion says that it is anticipated that a winning bidder would want to retain current Hutcheson employees, but that is not a requirement. Read more. 

Explore the intricacies of the health care profession and bankruptcy with ABI’s Health Care Insolvency Manual, Third Edition. 

Forest Park Medical Center San Antonio’s landlord has filed for bankruptcy protection after the hospital stopped paying rent, the San Antonio (Texas) Express-News reported on Saturday. FPMC San Antonio Realty Partners LP, which owns the real estate and building where the hospital operates, filed for chapter 11 on Tuesday in the U.S. Bankruptcy Court in San Antonio. The partnership has already hired commercial real estate firm CBRE to find a buyer for the property, said Todd Furniss, an executive with the landlord’s general partner. The approximately $100 million surgical specialty hospital opened its doors a year ago. It features 54 private patient rooms, 12 operating suites and six intensive care rooms. Read more. 

Read more about issues surrounding a hospital bankruptcy in ABI’s Health Care Insolvency Manual, Third Edition. 

Millennium Health LLC is struggling to wrangle enough support for a debt restructuring plan that would allow it to settle a federal billing probe by a deadline this week, Bloomberg News reported yesterday. Some lenders that bought the biggest U.S. drug-testing lab’s $1.8 billion loan at or near face value are demanding a bigger payout from shareholders, which include private-equity firm TA Associates. They want to extract more while other lenders who purchased the debt at deeply discounted levels are willing to accept less. Millennium is negotiating the terms for a bankruptcy filing at the same time that it’s finalizing a $275 million settlement of a federal investigation into its billing practices. The U.S. Department of Justice has said that it must have a plan to pay the sum by the end of this week. Read more.

For more on health care and medical company bankruptcy issues, pick up a copy of the ABI Health Care Insolvency Manual, Third Edition.