Preston Hollow Community Capital, a Dallas-based investment firm, has filed a petition to take over management of Mercy Hospital, a 234-bed facility in Iowa City, the Des Moines Register reported July 24.
The petition, which argues that Mercy Hospital is "in financial freefall," would place Mercy Hospital under a court-appointed receivership, enabling Preston Hollow to take over operations and address the hospital's ongoing financial challenges, according to the report.
Mercy Iowa City is reportedly battling unsustainable operating losses, and its liquid assets decreased by $40 million, more than 51 percent, in the past nine months, according to the Des Moines Register.
"If action is not taken immediately, the hospital may be forced to cease operations and shutter," Preston Hollow Community Capital wrote in the July 24 petition.
The investment firm reportedly invested $41.7 million into Mercy Hospital in 2018, but said the hospital is now unable to pay its debts, including $62 million in publicly issued bonds and $40 million in pension plans, according to the report.