Mercy Iowa City announced Tuesday night that investors led by Preston Hollow Community Capital, alongside their operational partner American Healthcare Systems (AHS), provided the best overall bid during the bankruptcy auction that began last week and concluded Tuesday, Oct. 10.
According to a news release, as part of the successful bid, the operations of the community hospital will be managed by AHS with financial support provided by investors led by Preston Hollow. Ownership of the hospital will be organized as an Iowa not-for-profit organization with board members comprised of community leaders in Iowa City and Johnson County.
A dollar amount for the bid has not yet been released.
“We know Preston Hollow as a bondholder, and we have learned more about American Healthcare Systems. AHS is experienced at operating and rehabilitating hospitals across the country,” said Tom Clancy, president and CEO of Mercy Iowa City, in the release. “As we celebrate our 150th anniversary here in Iowa City, it is comforting to know that they will continue to operate the hospital and our clinic network as a community-based health system.”
Upon final approval by the bankruptcy court, which is expected in the near-term, the parties expect that AHS will assume operational and financial responsibility of the hospital as early as mid-November, the release states.
“The transition planning has already started,” said Mark E. Toney, Chief Restructuring Officer, in the release.“We look forward to the new vision and path forward from AHS for the health system and are pleased by the commitment being made by AHS and Preston Hollow. We are also appreciative of the work and commitment shown by the University of Iowa as the stalking horse in the auction process. The University’s commitment was driven by preserving health care in Iowa City, which we believe this process has done.”
“We are very grateful to our physicians and staff who have patiently continued to provide high quality, compassionate care to our patients in the Iowa City community during this difficult process. With the support of many parties, we believe we have secured continuing care and a hospital for our community,” Mr. Clancy said, in the release.
This is a developing story. Updates will be published as more information becomes available.
