Hunter
09/12/23
Revisions to the bankruptcy sale of Mercy Iowa City filed Monday include removing the provision that the property continues operating as a hospital.
The Cedar Rapids Gazette reports Preston Hollow Community Capital and Computershare Trust Company objected to that provision, saying that it deters alternate bidders from competing with the $20 million bid from the University of Iowa. They argued that other types of bidders, including real estate developers, would be discouraged from bidding and purchasing Mercy at a more competitive price.
Preston and Computershare are owed a combined $63 million in outstanding secured debt by Mercy. They also plan to exercise their right to credit bid, which could force the University of Iowa to pay significantly more than the $20 million it has offered. Credit bidding would allow them to bid for the property and assets using the $63 million they’re owed. The two companies could then do their own search for a new operator, or sell the assets.
Mercy had initially hoped to put the deadline for bids at September 19th, saying its liquidity would be insufficient to pay the cost of ongoing operations by late September. They now have apparently agreed to extend the bid deadline to October 2nd, which would push a potential auction to two days later and a sale hearing to October 10th.
Another bankruptcy hearing is scheduled for Wednesday morning.