PRATT, Kan. (AP) — A Pratt-based hospice that serves 10 south-central Kansas counties plans to file a bankruptcy petition soon that will pay a "significant amount" of money on bonds, an attorney for the group said.
The South Wind Hospice filed for bankruptcy protection in November after it defaulted on bond payments for a hospice built in Pratt in 2005. It still owes about $1.9 million on the $3 million project, The Hutchinson News reported (http://bit.ly/YNNe7o).
The hospice, which employs 36 people, will get financing from a lender and use the money for bondholders, said Wichita attorney Edward Nazar, who represents the 22-year-old organization.
"The payment will be less than the face amount of the bonds, but it will be a significant amount," Nazar said.
At least one bondholder isn't happy with the proposal. Dennis Meyer, an investor in Olathe who bought about $20,000 of the original revenue bonds, said he would like Pratt Regional Medical Center to buy the hospice and operate it as an affiliate. He said that would allow the hospice to operate more efficiently and reduce redundant services.
However, Nazar said hospice Executive Director Ginger Goering and hospital officials have expressed no interest in owning or managing the hospice.
"They're two different things," Goering said. "We're protective of this and are working hard to make it better."
Pratt Regional Medical Center CEO Susan Page said the hospital's board hasn't discussed the hospice's situation.
Meyer said he's received no payments on the bonds in three years, and that the proposed settlement will pay only 40 cents on the dollar for the principal and none of the accrued interest, costing him about $15,000.
"One of my reasons for purchasing these bonds was the reputation of the Pratt community," Meyer said. "It just surprises me the Pratt community would let this go into bankruptcy and to force the bondholders to make a $2 million contribution to the facility. To be shuttered and out of business is one thing, but to just go into bankruptcy and have it come down on bondholders surprises me and, as an investor, disappoints me."
The agency recorded a $264,949 profit in 2012, according to the court documents, after losses in 2010 and 2011 totaling more than $300,600. Besides the $1.9 million bond payment debt, claims against the organization total $535,609.
That's a drop from about $850,000 in vendor debt when Goering became director nearly three years ago, she said.
"One of the things I've had to do as director is make things right with our creditors," Goering said. "A lot of agencies wouldn't have anything to do with us anymore. We owed money to everyone. That is no longer the case. We still owe money, but not to that degree. There's finally light at the end of the tunnel.
"I can tell you, we're an entirely different agency," she said. "We're really in much better shape."
Information from: The Hutchinson (Kan.) News, http://www.hutchnews.com