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Scott Co. still looking to close deal on hospital

2:02 AM, Jan 23, 2013   |    comments
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Time is ticking down toward a pivotal deadline to reopen Scott County's only hospital.

Scott County chose S.M. Promen of Tennessee to operate its
hospital in July. Local leaders failed to reach a deal with previous operator, HMA, just before the Scott County Hospital closed in May.

Since S.M. Promen was selected, it has been looking for ways to raise capital in order to operate the hospital. S.M. Promen President Irving Sawyers said his company needs $3 million in order to cover the facility's operations costs.

The Tennessee Attorney General's Office has yet to sign off on a deal between Scott County and S.M. Promen because of that issue. It needs to know S.M. Promen actually has the funds it needs to perform its job.

All of this comes as the date of January 31st continues to approach.

If Scott County and S.M. Promen do not have a deal reached by that date, both parties can withdraw from their purchasing agreement.

In order to avoid that scenario, Sawyers made a pitch to the Scott County Commission Tuesday night on the behalf of his investors. He told commissioners he is still trying to raise money in order to run the hospital, but his investors are concerned about giving the company money due to the presence of one provision in the county's purchasing agreement.

Sawyers wants the county to do away with a two-year covenant that would have prohibited S.M. Promen from mortgaging or borrowing any money against the hospital facility for two years.

He said his investors wanted some financial security.

"I somehow have to bridge the gap between what makes the investor comfortable and secure and what makes you [the commission] comfortable and secure and if I can get that gap bridged, I'm done," Sawyers said.

But, the Scott County Commission did not take action on Sawyers' proposal after listening to advice from a Nashville attorney, Ernest Hyne.

"I believe there is a great deal of risk to this county if you decide to waive that mortgage provision," he said.

Scott County Mayor Jeff Tibbals also said the commission felt Sawyers' proposal came too late in the process.

"His investors were asking us to give them our security blanket and take it away to give them one and I think the county commission after hearing both sides, especially from Ernie Hyne, the attorney, figured the best option was to take no action and leave the covenant involved," he said.

Sawyers told 10News he was not surprised by the commission's decision. He said he actually believes there is still a chance two investors he has been talking with could come through with the money needed to save the deal by January 31.

The commission has made plans to discuss the deal after the deadline. It has scheduled another meeting on the topic Monday, February 4 at 5 p.m. At that meeting, it will once again see what S.M. Promen has to offer.

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