Fate of Mercy Iowa City assets still undecided as week begins
Hunter
10/08/23
The fate of Mercy Hospital Iowa City remains up in the air as the week begins, with the University of Iowa’s “stalking horse” bid challenged by an unidentified second party and a scheduled auction last week unresolved.
The Gazette reports Mercy signed a purchase agreement in early August as part of a bankruptcy filing that would have the University of Iowa buying its assets for $20 million. At least one other bidder since has emerged, which led to last week’s auction.
In Friday’s new filing, the hospital asked to delay a sale hearing scheduled for Tuesday to a later date, possibly the week of October 16th.
A committee consisting of unsecured creditors and its largest bondholders agreed to the delay, but there has been no comment from University of Iowa attorneys.
Mercy indicated earlier that a sale must happen quickly as working capital is drying up.
Bondholders Preston Hollow Community Capital Inc. and master trustee Computershare did indicate in previous court filings that they planned to utilize the $63 million the hospital owes them and convert that into a bid for the assets. There has been no comment from the University of Iowa as to their position on a potential new price for Mercy’s assets.
Once a winning bidder is announced, they will be allowed to search for a new operator for Mercy’s operations, or sell the assets.