Chattanooga, Tenn.-based Erlanger Health System has filed a federal lawsuit to recover the tens of millions of dollars it allegedly issued Hutcheseon Medical Center under a previous management agreement, according to a Chattanoogan report.
Erlanger claims that, in May 2011, it entered an agreement to provide management services to Hutcheson, which is in Fort Ogelthorpe, Ga. As part of that alleged agreement, Erlanger issued a line of credit for $20 million to help meet Hutcheson's operating needs. Then, in May 2013, Erlanger allegedly loaned Hutcheson another $550,000 to help the hospital meet its payroll expenses, according to the report.
In January, Erlanger sent a letter to Hutcheson seeking repayment of the $20 million and $550,000 loans, but the requests in the letter were allegedly not resolved. This federal lawsuit seeks to recoup the $20 million, as Erlanger filed its first suit in late January seeking repayment of the $550,000 loan, according to the report.
Hutcheson has hired former Georgia governor Roy Barnes to defend it against the litigation, according to the report.
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