BMC Offers $4M for Bankrupt Northern Berkshire Healthcare
|Berkshire Medical Center has set an initial bid of $4 million to acquire the assets of bankrupt Northern Berkshire Healthcare, including North Adams Regional Hospital.|
NORTH ADAMS, Mass. — Berkshire Medical Center is offering $4 million to buy the assets of the bankrupt Northern Berkshire Healthcare.
The price is outlined in a use-and-occupancy agreement for BMC to operate a satellite emergency facility in the former North Adams Regional Hospital.
The assets include the hospital, VNA & Hospice of Northern Berkshire Inc. and Northern Berkshire Healthcare Physicians Group Inc.
A motion filed in U.S. Bankruptcy Court on Monday afternoon requests the court grant Harold B. Murphy, court-appointed trustee for NBH's Chapter 7 liquidation, authority to enter into the term-sheet agreement at a hearing scheduled in the Springfield court on Wednesday morning.
Murphy is not, however, seeking approval for any transactions.
"The U&O agreement is necessary in order to permit BMC to re-open an emergency department at the Hospital as soon as practicable and without having to wait for the sale process to be completed," the motion states.
BMC needs to have staff and equipment in place before it can obtain a final federal license from the U.S. Centers for Medicare & Medicaid Services.
Under the agreement, BMC would occupy and operate the hospital emergency department as well as radiology, laboratory and records services until it purchased the building or for a period not to exceed 365 days should an "alternative transaction" take place. BMC would retain the right to terminate the occupancy agreement with 90 days' notice.
BMC would be responsible for operating expenses and other related costs. The motion states that BMC's occupancy would not only benefit the community it would "provide funding for the costs of maintaining the Debtors' assets pending the anticipated sale of those assets."
The "Term Sheet for Stalking Horse Bid for Hospital and Family Medicine Building" is supported by BMC Inc., Murphy, trustees for the bondholders Wells Fargo Bank, N.A., and Attorney General Martha Coakley, according to the documents.
The stalking horse, or initial, bid is usually chosen by a company or other entity overseeing disposition of assets of a bankrupt company and sets the level for bidding to begin. If no other bids are received, BMC's bid will be considered accepted.
"The Term Sheet also provides the outline of a sale of substantially all of the Debtors' tangible assets to BMC or a higher or better bidder in a fashion that does not interrupt the emergency department services to North Adams and the surrounding communities," the motion states.
The 45-day bidding process is expected to begin at the end of May; a court hearing to set the bidding has been scheduled for May 27. Should no other bidders emerge, BMC expects to close the sale in mid-July.
BMC, a subsidiary of Berkshire Health Systems, is offering $3.4 million in cash for the hospital and its campus, which includes the parking garage, Clark House and Doctors Building, and $600,000 for the building occupied by Northern Berkshire Family Medicine at 820 State Road.
Should other bidders appear for either building or the personal assets and equipment, BMC may bid higher but is not obligated to do so.
Berkshire Medical Center is currently operating VNA & Hospice from offices on Union Street and the family medicine practice in its State Road building. BMC has hired nearly 150 former NBH employees to continue both those entities and to prepare for the reopening of emergency services.
BMC officials estimate $10 million will have to be invested in the hospital building to bring it up to current codes.
Northern Berkshire Healthcare closed its doors abruptly on March 28 and filed for Chapter 7 liquidation bankruptcy on April 3. State officials have been working with BMC to return emergency services to North Adams, an effort that has been heavily endorsed by U.S. Bankruptcy Judge Henry J. Boroff.
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