UC Memorial Hospital Board OKs hiring legal counsel in acquisition

Brad Hicks • Oct 10, 2012 at 10:31 PM

ERWIN — By the time the Unicoi County Memorial Hospital Board of Control meets on Monday, board Chairman Glenn Tilson hopes to have some information on attorneys who could represent the board during UCMH’s acquisition by a larger health care system.

In a called meeting Wednesday, UCMH board members present unanimously approved granting Tilson authority to engage legal counsel in the transaction involving the hospital. The attorney hired by the board is to have experience in mergers and acquisitions and not to have any prior connections to health care systems in the area.

With Wednesday’s approval, Tilson will search for attorneys meeting these requirements and hopes to bring information to the board at its regular meeting Monday.

“I would like, if it was up to the board, for me to gather information from several attorneys and get it to the board Monday, if I could get it to the board by Monday and let the board vote on those,” Tilson said prior to Wednesday’s vote.

Board of Control Secretary/Treasurer Russell Brackins said he would like to see the attorney possess prior acquisition and merger experience. Board member Sue Jean Wilson said, if possible, the board should know whether attorneys to be considered have any past ties to area health care systems.

After adjournment of Wednesday’s called meeting and before the board entered a closed strategic planning session to discuss “the hospital’s future” and discuss any new acquisition proposals received, Tilson said bringing in an experienced attorney is a necessary move.

“I do not have the expertise, and I don’t think anyone on the board has the legal expertise to make sure that all legal ramifications are available to protect all parties involved,” he said.

Tilson said UCMH interim CEO Jete Edmisson was awaiting a proposal from Wellmont Health System and that he had received no confirmation on the submission of a second Mountain States Health Alliance proposal. Tilson said the board hopes to make the proposals received available for public review today, seven days before it is set to consider acceptance of an acquisition proposal.

Tilson also discussed the process that led to the board’s consideration of MSHA’s letter of intent to acquire MSHA on Oct. 4.

He said the board’s Executive Committee previously made the decision to send requests for proposals to MSHA and Wellmont to see what they would offer in acquiring UCMH. He said he believes the board was able to make the decision to shop the hospital based on information available, and the RFPs were sent to the two largest health care entities as it was felt that they would submit strong acquisition proposals.

“We probably should have gone out for proposals sooner than we did,” he said.

On Oct. 4, after receiving proposals from Wellmont and MSHA in September, the UCMH board met to discuss and vote on MSHA’s letter of intent to acquire UCMH. After the meeting was opened for public discussion, the board voted to delay action until Oct. 18. The board also voted to allow other health care entities interested in acquiring UCMH to submit proposals until today.

Tilson said when the original proposals were submitted by Wellmont and MSHA, each entity requested confidentiality for the proposals. He voiced concern that when MSHA’s initial proposal was made available for public review on Sept. 27, it allowed Wellmont and other entities the opportunity to view the MSHA proposal and a submit a proposal to better it. Tilson said he questions whether it is ethical to allow others to submit proposals after the MSHA proposal was opened to the public.

Tilson said the Oct. 18 meeting, at which the board is set to consider a proposal for the acquisition of UCMH, will be held at Erwin Town Hall.

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