LRGHealthcare, which operates Lakes Region General Hospital and Franklin Regional Hospital, is filing for Chapter 11 bankruptcy protection, citing a huge debt load and other financial strains compounded by the coronavirus pandemic.
The Laconia-based health care entity, however, says it may have found a buyer in Concord Hospital, which submitted a $30 million bid to purchase its assets.
The joint announcements made Monday were months in the making for LRGHealthcare. The facility announced a major round of furloughs in April, and said at that time it had only six weeks of cash on hand to meet its expenses.
“We have known for some time that our current reality is not sustainable for the long term, and minor fixes will not get us where we need to be,” said Kevin Donovan, LRGHealthcare CEO in a statement. “Even before the significant impact of COVID-19, we were bearing a substantial financial burden.”
The non-profit hospital was carrying more than $112 million in debt, according to Donovan, largely due to outstanding mortgage payments and the cost of converting to electronic health records. Revenues during the pandemic were initially off by 60 percent as LRGHealthcare along with hospitals around the country shuttered elective procedures to preserve PPE and prepare for a possible surge in coronavirus patients.
LRGHealthcare received $5.25 million in zero-interest loans through a state program, as well as additional emergency aid from the federal government through the CARES Act.
Lakes Region General Hospital is licensed to operate 137 beds, while Franklin Regional is a 35-bed facility. The facilities will remain open and treat patients while the entity moves through the bankruptcy process.
While Concord Hospital has submitted an offer, LRGHealthcare says it will ultimately be up to the courts to decide what happens to its assets. Other health care entities will also be able to make bids, with an auction likely to take place in December, according to the hospital.
(Editor's note: this story was updated with additional information.)