LRGHealthcare files bankruptcy with $30 million offer from Concord

By Sarah Lizee

Olympia, Wash., Oct. 19 – LRGHealthcare filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of New Hampshire on Monday.

“LRGHealthcare has experienced a tumultuous five to 10 years, all beginning with decisions by prior management to make significant investments in inpatient services and facilities at a time when patient demographics and medical trends indicated more reliance on outpatient services and decreased hospital use,” president and CEO Kevin W. Donovan said in a declaration.

“Soon thereafter, LRGHealthcare found itself caught in a downward spiral of increasing costs, decreasing reimbursement, shrinking service lines and volume ‘leakage’ to other communities.”

LRGHealthcare undertook a series of turnaround efforts to decrease costs. However, the extensive cost cuts did not result in profitability or sustainability.

The company has entered into a proposed agreement with Concord Hospital to purchase substantially all of the debtor’s assets for $30 million under a stalking horse agreement.

The stalking horse bid provides for the continued employment of the debtor’s employees and ensures continued care for the patients in the areas that the debtor now serves.

According to court documents, the company has $100 million to $500 million in both assets and liabilities.

The company’s largest unsecured creditors are KeyBank as mortgagee/U.S. Department of Housing and Urban Development of Dallas, with an undisclosed under-secured liability claim; Pension Benefit Guaranty Corp. of Detroit, with an undisclosed underfunded pension liability claim; the State of New Hampshire Department of Health and Human Services based in Concord, N.H., with a $5.25 million unsecured loan/grant claim; and Laconia Clinic of Laconia, N.H., with a $1.41 million professional services agreement claim.

LRGHealthcare is a Laconia, N.H.-based not-for-profit health care charitable trust operating Lakes Region General Hospital, Franklin Regional Hospital and several other affiliated medical practices and service programs. The Chapter 11 case number is 20-10892.

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