By John Howell Sr.

U. S. Bankruptcy Judge David Houston moved the Tri-Lakes Medical Center closer to a Section 363 sale Tuesday which should assure uninterrupted hospital services at the Batesville location.

The judge’s order set a Wednesday, April 29 hearing to establish bidding procedures that will lead to May 31 sale date with a prospective buyer.

Just who that buyer will be is to be determined through an auction process, but Alliance Health Partners, LLC has been named the “stalking horse” bidder. Alliance Health Partners is headed by Meridian gastroenterologist and Batesville native Dr. Thomas Crowson. Batesville physicians William “Billy” Haire and Mike Havens are among investors in Alliance Health Partners.

Alliance has offered $14 million for the facility which entered chapter 11 bankruptcy in August 2007. In its purchase proposal, Alliance includes both the east and west hospital campuses, the hospital’s equipment, and the State Department of Health Certificates of Need and other licensing required to continue day-to-day operations at Tri-Lakes.

“We will take that particular bid and we will send it that out to people across the country and we will accept bids from all over the country,” Tri-Lakes’ Chief Restructuring Officer (CRO) Mike Morgan said Wednesday.

The letter of intent filed with the bankruptcy court establishes a closing date “on or before May 31.”

Terms of the stalking horse offer include assuming $11 million of the existing indebtedness of Tri-Lakes to UPS bank, $2.5 million to be paid in cash to Tri-Lakes on the date of closing and an additional $500,000 paid at specified intervals after the closing. The cash payments “shall satisfy the Seller’s outstanding obligations under the existing Debtor-in-Possession financing facility with GE, and shall pay all ad valorem and personal property taxes due and owing, …” the Letter of Intent (LOI) states.

The cash will also be used to “pay any agreed amount required to be paid to resolve any past liability of Tri-Lakes for Medicaid overpayments,” the LOI continues.

The offer, stated in Alliance Health Partners’ letter of intent (LOI), opens the bidding process for any other group seeking to buy the hospital’s assets in the Section 363 bankruptcy sale, triggering an auction.

“At the commencement of the Auction, the Debtor shall identify the prevailing or otherwise best Qualified Bid, which will either be the bid contained in the approved LOI or must exceed the Purchase Price contained in the Approved LIO by an amount not less than $415,000.00,” according to the order signed by Judge Houston Tuesday.

Of the latter amount, $400,000 would be paid to Alliance Health Partners as a “breakup fee” to cover its due diligence expenses incurred in preparing the “stalking horse” bid.