While the sale of the Barnwell County Hospital is slowly moving forward, the financially hurting entity will now have to pay out $625,000 to settle claims made in bankruptcy court by S.C. Regional Health Systems, LLC.
The settlement agreement, structured through arbitration with Barnwell and Bamberg counties, BCH and Bamberg Memorial Hospital, effectively delivers $625,000 to RHS and Dobbs Equity Partners, LLC, upon its approval by the bankruptcy court.
RHS/Dobbs' original administrative claim totaled $1,819,000. The claim arose out of the original asset purchase agreement (APA) and a consulting agreement BCH signed with RHS/Dobbs when RHS/Dobbs intended to purchase BCH's assets as well as purchase the Bamberg hospital. The APA was executed Sept. 29, 2011, and the consulting agreement was signed Nov. 28, 2011, and was amended Dec. 21, 2011.
When the purchase was not completed by June 30, 2012 as stipulated in the APA, BCH and BCC sought a new buyer.
The agreement was reached as the "parties desire to avoid the costs and uncertainties of litigation," the document states.
It also states the parties have negotiated in "good faith" and believe they have reached an "equitable and reasonable settlement."
As for payment to RHS and Dobbs, within five days of the execution of the agreement, BCH will have to deposit $350,000 into an escrow account. Furthermore, within 30 days of the settlement's effective date or the closing of the new APA, whichever is earlier, BCH is to pay RHS an additional $275,000.
The payments go back to the claim RHS and Dobbs filed in bankruptcy court for administrative expenses incurred while they were seeking to purchase the Barnwell and Bamberg hospitals.
Both Barnwell and Bamberg hospitals believed they did not owe RHS or Dobbs monies and both also asserted that they were entitled to damages from RHS/Dobbs, according to court documents.
Barnwell County Council and the Barnwell County Hospital Board held special called meetings back-to-back Feb. 22 to approve the settlement agreement with RHS. While BCC unanimously approved the agreement, Barnwell County Hospital Board member Richard Meyers opposed approving the agreement in that meeting.
The bankruptcy court must also approve the substitution of the new asset purchase agreement allowing Barnwell County to sell its hospital to BCH Acquisitions, LLC, for this settlement agreement to be finalized.