It could be years, in fact, before anyone knows for sure. And although no one is officially making predictions, a clue has emerged in recent weeks: $12 million from sale proceeds have been funneled into an escrow account with the county’s name on it.
The sale price itself was nearly 2.5 times that — around $29 million. But that figure is somewhat meaningless.
The real question is what’s left after all the loans, debts, bills and lingering liabilities are paid off.
Around $10 million was taken off the top of the $28 million sale to pay outstanding loans and lines of credit. Another $1 million was paid to WestCare, stemming from a gentlemen’s agreement intended to mollify the medical community in Jackson so they wouldn’t throw a wrench in the sale negotiations.
And then came the payoff of equipment leases, utility bills for the prior month, and invoices for medical supplies. Haywood, not Duke LifePoint, is responsible for any costs incurred before the changing of the guard — from cafeteria food to surgery instruments.
Settling up all those invoices and bills could take a year or more, and will continue to whittle away at what’s left over from the sale price. A special account has been set up to manage these payments.
“There was several million set aside to do the wind-up business,” explained Haywood County Manager Ira Dove.
County commissioners this week voted to hire an accounting firm and hospital finance consultant to handle the account.
“Someone needs to oversee the receipts and expenditure of funds,” Dove said.
Dove said the county has a “vested interest” in how the account is managed, since whatever is left over is what the county ultimately gets.
The county chose Dixon Hughes Goodman as its financial services firm and consultant Rick Hudson, a former hospital CEO from Wilson in eastern North Carolina. Hudson handled the so-called “windup” affairs of the hospital there following its sale, and thus knows the ins-and-outs of a truing up the balance sheet of a hospital that’s changed hands.
“I think it is a marriage of unique talents and qualifications,” County Commissioner Chairman Mark Swanger said of the team.
A county-appointed Haywood Health Authority will look over their shoulder, an entity comprised in large part by members of the former hospital board.
But, separate and apart from the wind-up fund, $12 million in sale proceeds was placed into an escrow account.
Although the details of how that figure was arrived at aren’t being shared, someone, somewhere, at some point along the line, had to decide how much to put in that escrow account.
It likely reflects someone’s best guess of how much could be left over at the end of the day. It will remain encumbered for up to six years, however, and isn’t untouchable. It could get tapped in the event of a malpractice lawsuit, employee grievance, billing error or other issue that predates the hospital’s sale.
Aside from the several million dollar account set up to handle the windup business, and aside from the $12 million in escrow, there’s yet another pot of money set aside — $2 million that’s in a purgatory of sorts. It will provide a cushion if the amount in the windup account isn’t enough, without having to go through the legal maneuvers of tapping the larger escrow.
County commissioners have publicly signaled their intention to place the final proceeds of the sale into a trust fund earmarked for health and wellness initiatives.