Iowa City’s Mercy Hospital says claims by its chief lender that the hospital is on the brink of financial collapse amount to “inexcusable” threats that could damage the 150-year-old institution.
Preston Hollow Community Capital, a lender and bondholder for Mercy Hospital-Iowa City, has filed a court petition seeking to have a receiver appointed to safeguard the hospital’s assets. Preston Hollow has also issued a public statement claiming the hospital has defaulted on loan agreements and resisted pressure to put in place a new strategy that might improve Mercy’s financial outlook.
According to Preston Hollow, Mercy is in a “financial freefall” and is on a path toward insolvency that will result in the hospital being unable to pay for day-to-day operating expenses by the end of September.
In a written statement issued late Monday, Mercy called that a “false narrative.” The hospital’s attorneys said in a letter to Preston Hollow that Mercy’s board has tried to work with the bondholder on restructuring the hospital’s debt, the Iowa Capital Dispatch reports. Read more.
