Bonds for medical center in Granby spark receivership lawsuit
March 24, 2015
Kremmling Memorial Hospital District was notified this week of a motion filed in District Court in Hot Sulphur Springs seeking receivership for the bond issue associated with construction of Middle Park Medical Center – Granby, according to MPMC officials.
The revenue bonds were issued in 2010 by the Middle Park Facilities Corporation, which was set up to finance construction of the $20 million, 20,000-square-foot center. The corporation was established rather than expanding the boundaries of the Kremmling Memorial Hospital District, which does business as MPMC, because officials at the time thought voters would not approve such an expansion.
The court complaint filed by the Trustee of the Certificates of Participation (bonds) cites concerns regarding the financial performance of MPMC vis-a-vis servicing the debt on the bonds, according to a statement issued by MPMC.
MPMC-Granby opened in late 2011.
MPMC CEO David Ross said Monday that the bonds have technically been in default for six months, but the bondholders agreed not to seek receivership until at least February to give MPMC time to improve its financial performance. MPMC declined to sign a proposed forbearance agreement in January that would have provided more time before bondholders sought receivership, Ross said, because MPMC legal counsel felt the terms were onerous.
MPMC "continues to follow the advice of legal counsel regarding the situation and is disappointed at not being able to reach a resolution regarding forbearance," the MPMC statement says.
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"We do believe we've made some real improvements," Ross said Monday.
"In fact, we're expanding, we're improving, and hopefully this will not have an adverse impact on our employees and patients," he said.
It is not clear what will occur next in the court case. Ross said MPMC will file a motion to dismiss the motion seeking receivership and that it likely will take months to sort out the case.
Meanwhile, the MPMC-Granby will continue to operate as usual, he said.
"This situation will not impact our efforts to continue providing financially viable healthcare services to our communities," Ross said in the prepared statement.
In addition to MPMC-Granby, the district operates MPMC-Kremmling, formerly known as Kremmling Memorial Hospital, a clinic in Walden and various family practice clinics in Grand County.
For more information about MPMC, visit http://www.mpmc.org.