The 11th U.S. Circuit Court of Appeals Thursday ruled Walker County in Georgia must pay $8.7 million in debt it owes to Chattanooga, Tenn.-based Erlanger Health System, according to a Times Free Press report.
Here are six things to know.
1. The debt can be traced back to 2011, when Erlanger loaned $20 million to Walker County, the governing body Fort Oglethorpe, Ga.-based Hutcheson Medical Center, according to the report. At the time of the loan, which was part of Erlanger's agreement to run day-to-day operations at the Georgia hospital, Hutcheson was struggling financially. Hutcheson eventually filed for Chapter 11 bankruptcy protection in November 2014.
2. Walker County and Catoosa County, also in Georgia, had some insurance for the loan, the report notes. This insurance came as an intergovernmental agreement with Hutcheson's board. The counties agreed to pay $10 million each if the Georgia hospital was unable to repay the $20 million, reports Times Free Press.
3. In December 2015, Hutcheson closed for three weeks but ultimately reopened after reaching a deal with ValorBridge, affiliated with Atlanta-based ApolloMD, to purchase Hutcheson for $4.2 million. Hutcheson was renamed Cornerstone Medical Center.
4. As part of the deal, Erlanger received about $2.6 million, reducing the Georgia counties' owed debt to $8.7 million each.
5. Catoosa County and Erlanger reached a reached a settlement in June of last year, under which the county agreed to pay Erlanger $6.2 million, reports Times Free Press. In the end, Erlanger filed a lawsuit against Walker County.
6. U.S. District Court Judge Harold Murphy previously granted Erlanger summary judgment, ruling Walker County still owed $8.7 million, according to the report. The ruling was appealed by Walker County. But, the report notes, this week's ruling from the 11th U.S Circuit Court of Appeals affirmed the district court's ruling.
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