CONYERS - The proposed sale of Rockdale Medical Center will continue to move forward, according to a letter sent to the Georgia Attorney General's Office that was submitted jointly Friday by hospital officials and Signature Hospital Corporation.
The Rockdale County Hospital Authority and RMC Board of Directors said in the letter they were willing to continue with the sale of the hospital and to spread out a portion of the $87.7 million transaction, as requested by Signature. The letter was sent by Larry D. Pless, attorney for the hospital authority, and Signature attorney Ashby Q. Burks. The letter was addressed to Ray O. Lerer, deputy attorney general and hearing officer for the hospital sale.
As a condition for the process to continue, the Hospital Authority and RMC Board of Directors approved a 16-point list of nonbinding terms for discussion during a called meeting Thursday.
The Georgia Attorney General's Office was prepared to make its recommendations on the transaction when Signature made a last-minute proposal to change $20 million of the total purchase price from cash to a promissory note that would be paid to the Hospital Authority over time and with interest.
The Attorney General's office delayed its recommendation for 30 days and required both the Hospital Authority and Signature to file letters Friday to specify the current status of the proposed $87.7 million sale.
Authority Chairwoman Ethel Boyle said authority and board members had spent a lot of time during the past week working on the terms to be presented to Signature.
Among the terms were that $25 million of the total price be paid as a secured promissory note. Interest on the note would be calculated quarterly and not exceed 10 percent in any one year. The note would be subordinated to Signature's "senior lending syndicate," or financial backers. The note will also allow Rockdale County Hospital Authority to hold mortgage and security liens on four hospitals owned by Signature, including RMC.
The note would have to be paid off within five years, according to the document.
Other points intend to protect the previously negotiated right of first refusal afforded to the Hospital Authority after seven years to buy back the hospital and the right to name a member to Signature's board of directors.
The terms passed by the authority also seek to have Signature pay for various attorney and accounting fees incurred from the extra work of filing with the Georgia Attorney General's Office after the company's proposal.
The terms are for discussion only and will be taken up with Signature in the coming weeks. The Attorney General's Office has extended issuance of the report of findings for an additional 30 days, or until Jan. 14. At that time, the Attorney General's report is mandated by state law to ensure a fair value is being received on public property being sold to a private company.
Boyle said everyone was at first taken by surprise by Signature's move but were willing to work with the company. Asked if Signature indicated why it made the move, Boyle said the credit crunch stemming from the sub-prime mortgage crisis may have been one motivator for Signature.
Signature had indicated earlier in the week that it wished to continue the process and complete the sale of the 138-bed hospital by the end of January. Signature fowarded a copy of the letter late Friday without comment.
Jay Jones can be reached at email@example.com.