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Berkshire Health Systems Closing In On Deal To Acquire NBH

By Tammy Daniels
iBerkshires Staff
11:47AM / Wednesday, April 16, 2014
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Discussions for Berkshire Health Systems to take over Northern Berkshire Healthcare continued in U.S. Bankruptcy Court on Wednesday.

SPRINGFIELD, Mass. — Berkshire Health Systems is closer to a deal to acquire the assets of Northern Berkshire Healthcare.

A status hearing on the bankruptcy proceedings of NBH was held on Wednesday morning in U.S. Bankruptcy Court.

Harold B. Murphy, the court-appointed trustee of NBH, said "substantial discussions" for both short-term use, and long-term disposal of assets, are ongoing.

"It could be either or both," he said later. "Ideally it would be both."

Both sides reportedly were in negotiations until 11 p.m. Tuesday and again Wednesday morning before the hearing, which started more than a half-hour later than scheduled.

Paul W. Carey of Mirick, O'Connell, DeMallie & Lougee, LLP, representing Berkshire Medical Center Inc., said a proposal had been made for the NBH properties last week and put in writing and a response had been received.

"There are open issues that have to be resolved," said Carey. "We are working as diligently as we can to come to a conclusion."

The two health systems had reportedly been in conversations for some time about a merger or partnership before a deal fell apart over NBH's debt. Wells Fargo Bank, N.A., trustee for the bondholders, holds some $35 million in new bonds from 2012 after NBH emerged from Chapter 11 bankruptcy. Within days, North Adams Regional Hospital was closed and more than 500 jobs were lost.

The hearing showed progress over last week, when Murphy and BHS were at an impasse over how much of the hospital campus would be required to reopen emergency services. Murphy had insisted the entire hospital building would have to be leased; BHS representatives claimed even operating just the emergency department would be too costly and that they would look elsewhere to set up services.

Berkshire Medical Center, an affiliate of BHS, had been designated by Berkshire Superior Court to provide emergency services if at all possible as part of a temporary restraining order requested by the attorney general's office to force NBH to maintain the necessary assets to reopen the emergency department. That order was preempted with a similar order by the federal court.

Since NBH's Chapter 7 liquidation bankruptcy filing April 3, the Pittsfield-based Berkshire Health Systems has hired more than 140 NBH employees, including doctors, and is maintaining its former OB/GYN, primary care and VNA and hospice services. Some of those are currently going through orientation at BMC's emergency room.

BMC has obtained state licensing to operate a "satellite emergency facility" and is in the process of obtaining the federal approvals.

Robert C. Ross of the attorney general's Business and Labor Bureau, representing the state Department of Health, said final federal licensing could be completed within the week. However, the Centers for Medicare & Medicaid Services will have to accredit the facility being used.

That means everything would have to be in place — from the linens to the nurses and doctors — for CMS to do a walkthrough inspection prior to opening, said Ross.

Judge Henry J. Boroff reiterated that something needs to happen soon to restore emergency services.

"Emergency services of this community need to be addressed immediately," he said. "I will be very disappointed if that progress is delayed because bureaucratic procedure is an obstacle." 

He said he wants to know the name of the person who had to do the final sign-off on emergency services being restored.

"So if there is a tragedy, I know at whom to point the finger."

Another status hearing is scheduled for April 24 at 10 a.m. at U.S. Bankruptcy Court.

Updated and complete write-thru at 5:19 p.m.


Tags: bankruptcy,   NARH,   NBH,   

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