The board of regents has approved the University of Iowa's request to purchase most of Mercy Iowa City's assets for $20 million, The Gazette reported Aug. 8.
UI Health Care is the first bidder in the assets auction, but the state refuses to be left on the hook for the $63 million Mercy Iowa City owes in debt, according to the report. Under the proposed purchase agreement, the university will not "be obligated to pay, discharge, perform or assume any debt, obligation, expense or liability of sellers."
Mercy Iowa City, a 234-bed facility, has had a challenging couple of months. Leaders fought back against Preston Hollow Community Capital, the hospital's biggest investor, filing a petition for its receivership. The Dallas-based investment firm argued that Mercy Iowa City is "in financial freefall" — claims which the hospital denies — and sought to take over operations.
UI Health Care hopes that the assets auction can be completed by the end of September, with the transaction wrapped up by October at the latest, according to the report.