Mercy Iowa City files bid procedures for assets, eyes Sept. 22 auction

By Sarah Lizee

Olympia, Wash., Aug. 10 – Mercy Iowa City set the bid procedures for its assets and is seeking approval from the U.S. Bankruptcy Court for the Northern District of Iowa, according to a motion filed Wednesday.

The hospital said in a press release that it has signed a letter of intent with the University of Iowa on a plan where the university will acquire substantially all the operating facilities and key assets of Mercy, preserving the continuity of care for patients and continuing opportunities for physicians and employees.

The university is serving as the stalking horse bidder.

The purchase price under the stalking horse agreement is $20 million, plus assumed liabilities.

There is a 4% breakup fee and a $400,000 expense reimbursement.

Under the proposed bid procedures, the bid deadline would be 6 p.m. ET on Sept. 19, an auction would be scheduled for Sept. 22, and a sale hearing would take place on Sept. 27.

The Iowa City-based hospital filed Chapter 11 bankruptcy on Aug. 7 under case number 23-00623.

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