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Crittenden Regional Board Extends Liability Coverage, Then Files for Bankruptcy [Cihan News Agency (Turkey)](Cihan News Agency (Turkey) Via Acquire Media NewsEdge) Crittenden Regional Hospital's directors raised concerns about potential lawsuits against them and voted to extend the board's liability insurance the day before filing for bankruptcy in September. The board and its executive committee met at least six times in August, leading up to the Sept. 7 closure of the hospital to discuss finances and messaging once it was decided to file for Chapter 7 protection, according to the meeting minutes reviewed by Arkansas Business. At a telephonic meeting of the full board on Sept. 11, the day before the bankruptcy petition was filed, the members voted to extend the hospital's directors and officers' liability insurance for six years. The insurance was estimated to cost between $200,000 and $250,000. According to a resolution signed by Chairman David Rains Jr., the board instructed its insurance broker, Marsh USA, to maintain D&O insurance totaling $5 million. The D&O policy is expected to play a role in two lawsuits that accuse the hospital of misusing money that was intended to go toward the employee health plan. In a meeting on Aug. 20, the day after the board voted to prepare the hospital for bankruptcy, directors asked the hospital's attorney, Denise Burke, about their liability exposure. "The Board asked about the scope of coverage it had should there be lawsuits brought against it or against individual members. Burke reported there to be insurance for the Board and that the hospital was looking to pre-pay for the coverage," according to the meeting minutes signed by Rains. At the same meeting, the board reviewed proposed talking points about the hospital's closure and a set of frequently asked questions that would be distributed after the announcement. About a month before the hospital's closure, the board reviewed a report by Dixon Hughes Goodman LLP, a CPA firm from Charlotte, North Carolina. The document was described as a "deep dive into hospital finances." Jeff Booth, a representative from the firm who spoke at the meeting, reported that "immediate attention" was required because the hospital was running out of cash and "vendors were pushed to the limit," according to the minutes. Booth told the board that the hospital had only enough cash to continue operating for six weeks and would need a $9 million loan to operate until January 2015. Minutes from the following meetings show the hospital's directors and consultants continued to negotiate with potential buyers and partners over the next several weeks but failed to come to an agreement. The only offer, of $12 million, came from Tenet HealthSystem Medical Inc. of Dallas, according to the minutes. But that offer did not address the hospital's pension, which was underfunded by $5.8 million, or provide a loan to cover a $3 million monthly shortfall. In an Aug. 24 resolution that authorized the closing of the facility, the board recognized the "numerous strategic initiatives" taken to stay open and the difficult decision it was faced with. "[A]fter more than sixty years of serving Crittenden County, the board has concluded with much regret that it is advisable and in the best interests of the hospital to discontinue all patient care services and related operations," the resolution states. (c) 2014 Cihan News Agency. All right reserved. Provided by SyndiGate Media Inc. (Syndigate.info). |