Ellwood City has retained a Kentucky attorney on an emergency basis to represent its interests in the Chapter 11 bankruptcy of the owner of the now-closed Ellwood City Medical Center.
ELLWOOD CITY — The borough has retained a Kentucky attorney on an emergency basis to represent its interests in the Chapter 11 bankruptcy of the owner of the now-closed Ellwood City Medical Center.
R. Aaron Hostettler of the Hamm, Milby & Ridings PLLC law firm in London, Ky., officially filed paperwork late last week to represent Ellwood City in the proceedings.
Ellwood City Council is expected to formalize his contract at its Monday meeting. Borough Manager David Allen said officials had to get Hostettler in place immediately because hearings already were beginning in the U.S. Bankruptcy Eastern Kentucky District Court for Americore Holdings LLC, the parent company for the local hospital.
Allen said Ellwood City still is not listed as a secured creditor in the case, even though it has a lien against the company, which now lists its headquarters in St. Louis, Mo., for about $300,000 in delinquent electric charges. It also is owed about $100,000 in property taxes for 2019.
Hostettler will be responsible for arguing on the borough’s behalf for that money and any other issues related to how Americore operated the Pershing Street facility since its acquisition of the former Ellwood City Hospital in 2017.
Ellwood City is not the only creditor to have problems with what Americore has claimed in its paperwork filed with the court. Attorneys for several others also have filed to be party to the case.
The court last week rejected Americore’s list of creditors as deficit and gave it two weeks to amend the report. At least seven other forms filed by Americore also have been rejected and ordered to be remedied in the next month.
If the forms are not corrected to the court’s wishes, U.S. Judge Gregory R. Schaaf can dismiss the case or order the company into Chapter 7 bankruptcy, in which assets would be liquidated to pay creditors. Chapter 11 allows a company to hold onto its assets while its attempts to reorganize.
A hearing for creditors has tentatively been scheduled for 2 p.m. Feb. 27 at the Community Trust Bank Building, Room 529, 100 E. Vine St., Lexington, Ky. A deadline has not been set yet for creditors to file their claims against Americore.
The Ellwood City Medical Center has been closed since Dec. 10 after the state Department of Health shut down the emergency room and inpatient services on Nov. 27 for serious violations. At least 152 workers have been laid off in the last two months, leaving only about 20 workers there, mostly in security and custodial positions.