Accusing Mercy Iowa City of shifting blame for its “prolonged” financial deterioration that preceded “a bankruptcy fire sale process for a mere $20 million,” bondholders have asked a judge to appoint an examiner to investigate the hospital’s downfall and answer key questions.
In court filings, major Mercy Iowa City investor Preston Hollow Community Capital — along with the master trustee of its debt — said the hospital “threw in the towel” and filed for bankruptcy protection without consulting them, The Gazette reports. Should a “below-market” offer from the University of Iowa go through, the filing asserted, Mercy will cease to be an independent “full-service acute care hospital.”
“Upon information and belief, the University of Iowa intends to reduce Mercy’s existing acute care service lines and convert Mercy into largely a behavioral health hospital,” the filing alleged. Read more.
