Those suits led Powell Valley Healthcare to file for Chapter 11 bankruptcy last year; an agreement with the patients is a significant step toward resolving the case.
“We’re definitely moving,” Powell Valley Healthcare Board President R.J. Kost said recently, before a deal was announced.
Attorneys representing Powell Valley Healthcare and an unsecured creditors committee — which is comprised of some of the former patients of Dr. Jeffrey Hansen who are suing PVHC — have worked on an agreement for months.
In a Friday court filing, PVHC bankruptcy attorney Brad Hunsicker said the organization was “pleased” to announce that a deal has been struck.
“... After extensive negotiations, PVHC, the creditor committee, various tort claimants and the Powell Hospital District have negotiated final terms for a consensual plan,” Hunsicker wrote.
The filing did not include any details or specifics; Hunsicker wrote that PVHC expects to finish drafting the documents and file a plan within the next 30 days.
PVHC had faced a Friday deadline for filing its reorganization plan, after which point any of the organization’s creditors could submit a plan for the court’s consideration. In Friday’s filing, PVHC asked U.S. Bankruptcy Judge Cathleen Parker to extend the organization’s exclusive window for filing a plan until April 10.
It was PVHC’s fifth request for an extension and “further requests (for) extensions appear unlikely at this point,” Hunsicker wrote.
Powell Valley Healthcare filed for Chapter 11 bankruptcy last May after determining that the bankruptcy process would be the fairest and most efficient way to resolve roughly 20 lawsuits. The suits were filed over alleged malpractice by Hansen, generally between 2011 and 2013, and they allege PVHC leaders were too slow in responding to complaints about the orthopedic surgeon.
Shortly after filing for bankruptcy, Hunsicker said PVHC recognized that the patients “have legitimate claims and that they need to be paid.”
Once finalized, the agreement between PVHC and the unsecured creditors committee would become a part of the PVHC bankruptcy relief. “It will be, at least, a start,” Kost said in late February.
“Both sides said they would like to have it as quickly as possible,” he said. “Once they sign it and both sides agree to it, then we can start processing to what the agreement is, and they will be able to write a full documentation.
“We should be totally out of bankruptcy by the end of May — but that is me purely speculating,” Kost added. “Your definition and my definition of ‘quickly as possible’ might be totally different.”
PVHC has spent nearly $1.2 million on legal and other fees since filing for bankruptcy, according to financial statements that run through Jan. 31.