ST. LOUIS — A bankruptcy court judge said Thursday that he would grant a motion to sell St. Alexius Hospital, a 190-bed south St. Louis institution that has struggled financially for years.
The hospital’s owner, Americore Holdings, has been in Chapter 11 bankruptcy proceedings since late 2019, in the U.S. Bankruptcy Court for the Eastern District of Kentucky.
SA Hospital Acquisition Group has submitted a bid for the hospital, with a purchase price that includes $17 million in cash payments. Under the terms of the agreement, the sale would close no later than Aug. 21.
Carol Fox, the trustee for Americore’s case and a principal at the financial advisory firm GlassRatner Advisory and Capital Group, described the group as experienced operators.
“This is a great day for the Hospital,” Fox told the Post-Dispatch in an email Thursday.
Court documents show that SA Hospital Acquisition Group’s members include Lawrence Feigen, Ben Klein, Jeff Ahlholm and Mohammad Anwar.
During Wednesday’s hearing, Fox also said Troy Schell is a member of the acquisition group. Schell is an attorney who previously served as general counsel for Ontario, California-based Prime Healthcare Management Inc.
According to records from the Missouri Ethics Commission, SA Hospital Acquisition Group has added a dozen associated lobbyists this month.
Second sale in two years
In 2018, St. Alexius Hospital’s previous owner, Florida-based Promise Healthcare Group, filed for bankruptcy. In January last year, the bankruptcy court authorized Promise to sell its ownership stake to hospital management company Americore Holdings.
Americore owned St. Alexius for less than a year before it also filed for bankruptcy.
In June, one of Americore’s lenders — The Third Friday Total Return Fund — submitted a proposal to consolidate St. Alexius and the rest of Americore’s assets and take ownership for $47 million, according to court documents. The proposed purchase price included $22 million in cash and a $25 million credit bid.
Fox and her legal counsel said during a hearing Wednesday that Third Friday was not a qualified bidder for the hospital, arguing that it had not proven it had the financial backing to complete the acquisition.
Americore’s bankruptcy case includes three other facilities either owned or formerly owned by the company: Izard County Medical Center, a critical access hospital Americore owns in northern Arkansas; Ellwood City Medical Center in Pennsylvania, which was reportedly shut down in December 2019 and is now for sale; and Pineville Medical Center, a Kentucky hospital Americore no longer operates.
The bankruptcy court judge cited infrastructure issues at St. Alexius as reasons for a prompt sale.
During Wednesday’s hearing, Fox described the physical condition of the hospital. She said the elevator was recently fixed. A boiler needs replacement.
“Every area of the hospital needs an upgrade of some sort,” Fox said.
The hospital largely serves patients who are uninsured, or who rely on Medicare or Medicaid.
In the past 18 months, vendors have filed lawsuits for nonpayment. Employees’ paychecks have arrived late. The Missouri State Board of Nursing considered shutting down the hospital’s Lutheran School of Nursing, after a site visit found issues with finances, faculty turnover and substandard facilities.
“There are significant infrastructure issues at St. Alexius that justify a prompt sale by Aug. 21,” said the bankruptcy court judge, Gregory Schaaf, as he explained his decision in a hearing Thursday. “Overall, the testimony does not support a ‘wait-and-see’ approach.”
City alderman Cara Spencer, whose ward includes St. Alexius and the Lutheran School of Nursing, said she has been concerned by a lack of community input in the sale process. Spencer and other city officials have advocated to keep St. Alexius and its nursing school open, citing the importance of providing medical care in south St. Louis.
Jacob Long, a spokesman for St. Louis Mayor Lyda Krewson, said in an email that the mayor has discussed the sale with Fox, the trustee, and “believes this is the best possible outcome for our community.”
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