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Bankruptcy judge weighs halting Barnwell hospital sale

Tuesday, June 11, 2013 1:40 PM
Last updated 6:44 PM
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COLUMBIA — Cautious about telling a county council what it can and cannot do, U.S. Bankruptcy Court Judge David Duncan said he needed more time to decide whether to halt the sale of Barnwell County Hospital.

After a nearly two-hour hearing, Duncan said he would put some more thought into the arguments and revisit the state Supreme Court decision before issuing a decision later in the day. By early Tuesday afternoon, his order was not yet announced.

The group fighting the sale, led by former hospital board chairman Don Alexander, filed an emergency motion to stop the impending transaction, scheduled for Wednesday.

“Once the sale goes through, it will be much like an egg broken,” said Keith Babcock, the attorney representing Alexander. He emphasized that last month’s S.C. Supreme Court decision that found members of the County Council had violated the constitutional prohibition against dual office holding had invalidated the Hospital Board’s past actions toward selling the hospital.

“They had no authority to do what they did,” said Babcock, adding that halting the sale scheduled for Wednesday, amounts to “enforcing the law in South Carolina.”

After a nearly two-hour hearing, Duncan said he would put some more thought into the arguments and revisit the Supreme Court decision before issuing a decision later in the day. By early Tuesday afternoon, his order was not yet announced.

But during Tuesday’s hearing, the federal judge had reservations about granting a dismissal outright.

“I have a real concern about ... enjoining a municipality from doing what it wants to do,” said Duncan.

Arguing in favor of allowing the sale to proceed, attorney Stanley McGuffin said the Supreme Court’s decision left to door open to allowing the past actions of the Hospital Board to stand. He also took exception to the timing of his opponents’ latest push, noting that “here we are, 24 hours before the sale,” when they could have challenged it long ago.

McGuffin pointed to the levels of support for the sale -- that the creditors had voted to approve it, and the last two prospective purchasers also said they wanted the transaction to take the form of a bankruptcy sale.

Members of the county council had appointed themselves to replace the sitting hospital board members in April of 2011. The county council officials had defended the relationship as one operating in a “vertical” direction, not “horizontal.” It was proper, in their view, because the hospital board had no power above the council. On May 29, the Supreme Court disagreed.

A circuit judge is expected to decide what the impact will be. A new county council election could be held, and past hospital board decisions could be thrown out, among other outcomes.

“They’re saying, ‘go unscramble the eggs,’” said Duncan.


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