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Suit seeks central Arkansas hospital property foreclosure; Jacksonville mayor says he’s in talks about deal to reopen emergency room

by Andy Davis | September 14, 2019 at 9:13 a.m.

A bank on Friday filed a lawsuit to foreclose on the former North Metro Medical Center property in Jacksonville, saying the hospital's owners have failed to make payments on almost $9 million in outstanding loans.

The suit by First Arkansas Bank & Trust came just over three weeks after the hospital abruptly closed its emergency room and changed its focus to caring for elderly psychiatric patients.

According to its license, the hospital is now known as Freedom Behavioral Hospital of Central Arkansas.

In the lawsuit in Pulaski County Circuit Court, the bank says it issued $11 million in loans to the hospital's owners on April 12, 2012, the same day Allegiance Health Management purchased the hospital from the city for $10.2 million.

The loans were originally due to be paid off in 2014, but the dates were extended multiple times, most recently to June 2020, according to the lawsuit.

The bank said the hospital's owners have failed to make required payments, refused to provide financial statements and failed to consistently maintain insurance coverage on the property.

It asked for a judge to enter a decree of foreclosure and order the sale of the property if the debt isn't paid within 10 days of the decree.

The suit was assigned to Judge Tim Fox.

A message left at Allegiance's offices in Shreveport wasn't returned late Friday.

Jacksonville Mayor Bob Johnson has said he has been in discussions with other hospitals about a deal that would allow the city to reopen the emergency room, with the ultimate goal of having a new owner operate the entire hospital.

He said Friday that he is hoping the foreclosure proceedings don't affect his plans.

"If I can get something done quick enough, we might could head that off," Johnson said of the foreclosure suit. "I just promise you the bank doesn't want to be in the hospital business."

He said he has been in talks with two hospitals about possible deals.

"I feel like I'm getting closer every day to making an announcement," he said.

Metro on 09/14/2019

Print Headline: Suit seeks central Arkansas hospital property foreclosure

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