BRUNSWICK, Maine — Chief U.S. Bankruptcy Judge Peter Cary on Thursday signed off on the merger of Parkview Adventist Medical Center and Mid Coast Health Services.
The sale of Parkview to its longtime rival was scheduled to be finalized later Thursday.
Mid Coast Health Services spokesman Steve Trockman confirmed the court decision and pending sale Thursday.
The agreement ends what at one time was veered toward “a medical arms race” in the Brunswick region, where Lewiston-based Central Maine Healthcare Corp. operated Parkview since 2008.
That fight culminated in a board meeting for the 55-bed nonprofit Seventh Day Adventist hospital Wednesday, when its members approved the purchase offer from Mid Coast over a proposal from CMHC.
An attorney for Mid Coast said during a court hearing Thursday that the board members considered in part a letter from Attorney General Janet Mills that stated Mid Coast’s offer was an “innovative plan both to preserve the charitable goals of the founders of Parkview Adventist Medical Center and to better serve the needs of the community by creating a single health care presence in the Brunswick area, instead of fostering the divided and costly competition that has existed over many years.”
Mills wrote her office did not have an opinion about which plan is in the best interest of creditors in the bankruptcy case.
The sale agreement states Mid Coast will rehire all of Parkview’s 190 employees and management and appropriately credentialed physicians. The agreement also states Mid Coast “will use its best efforts to recruit and employ two new Seventh-day Adventist physicians.”
Mid Coast plans to preserve the 55-bed Parkview’s religious affiliation, entering a five-year “spiritual support agreement” with the Northern New England Conference of Seventh-day Adventists.
“Mid Coast will receive counseling and consulting services and the expertise relating to faith based health care that Mid Coast views as important to its future success,” Mid Coast CEO Lois Skillings wrote in testimony filed with the court Wednesday.
Mid Coast’s Chief Financial Officer Bob McCue wrote to the court that the approximate expenditure for Mid Coast under the sale agreement is $7.87 million, including fulfilling certain outstanding financial obligations from Parkview and investing $3 million over three years at the Parkview campus.
At closing, the agreement calls for Mid Coast to pay $3.8 million to the bankruptcy estate and forgive $579,540 of an advance it gave to Parkview during the bankruptcy proceeding.
CMHC, the parent organization of Central Maine Medical Center in Lewiston that extended loans to Parkview and previously attempted to merge with the hospital, disputed the sale and expenditure amount before the court ruling Thursday.
“Mid Coast Hospital also proposes to pay the amount of $280,000 per year for five years to the Northern New England Conference of Seventh-day Adventists, and proposes to make capital improvements to the property they will then own in the amount of $1 million per year for three years,” CHMC’s attorneys wrote in an opposition brief filed with the court Aug. 14. “Neither of these payments benefits the debtor’s estate or the creditors of [Parkview] and should not be counted in determining the consideration Mid Coast Hospital is proposing to pay for [Parkview’s] assets.”
The earlier merger effort by CMHC prompted Mid Coast to submit its own request to take over Parkview, but that application was denied. After learning the state would deny its proposed merger, CMHC placed it “on hold” for a year to supply additional information but later withdrew the application.
This month, CMHC launched another effort to acquire Parkview as part of the bankruptcy case that came “pre-packaged” as involving a sale to Mid Coast. CMHC objected to the sale motion approved Thursday morning, arguing it was not appropriate to consider the future investments of Mid Coast as part of the total consideration paid for the Parkview’s assets. With that, CMHC wrote it was prepared to offer at least $6 million for the hospital and did offer $8 million, which would have included cash on top of $3.8 million it claims it holds in debt from Parkview.
CMHC said that would put about $2.1 million in cash into the estate, which it argued the court should prefer over the about $1.8 million in cash it calculated Mid Coast would pay for Parkview’s assets.
Mid Coast argued that in the bankruptcy reorganization of a nonprofit, the court is required to consider not just the interests of the estate but also the best plan for continuing the nonprofit’s mission.
“Ignoring the law, CMHC contends that its counteroffer is better than the [Mid Coast sale] because CMHC is offering more money,” Mid Coast’s attorneys wrote in an opposition brief filed Monday. “However, that argument does not carry the day as the court must evaluate other considerations affecting the sale of a nonprofit hospital.”
The sale agreement total from McCue included the $3 million for capital improvements at Parkview and other costs.
McCue wrote in his testimony that if the court upholds CMHC’s claims to debts from Parkview, CMHC would be paid $3.5 million out of the proceeds of the sale to Mid Coast.
Officials from Mid Coast Hospital and Parkview said they would offer further details of the new “Mid Coast-Parkview Health System” at a news conference scheduled for Friday morning at Parkview, Trockman said.
On Thursday, spokesman Chuck Gill said CMHC “is very disappointed” with the judge’s approval of the sale.
CMHC also contends Parkview owes it, as well as its affiliate Central Maine Medical Center, upwards of $13 million in claims.
But Herbert Paris, former longtime president and CEO of Mid Coast Health Services, said Thursday afternoon that the merger finally would allow the two organizations and their patients to “heal all wounds” and move forward.
“It’s going to strengthen our ability to deliver top-notch health care services, hospital services, [and] medical services,” Paris said. “For a long time we knew that this area really only had a population large enough to support a single hospital and health care system. We tried for a long time to bring that to pass. I’m delighted it’s finally happened.
“Mid Coast Hospital is a magnet hospital and a well-respected one,” he said. “The Bath-Brunswick area has a medical staff that’s close to 125 to 130 physicians. I think we’re well-positioned to grow in the future and to have a strong health care system which will look to the needs of our local community and self-govern.”
View the asset sale agreement for Parkview below:
Walter Wuthmann of The Forecaster contributed to this report.