With the conversion of the bankruptcy of the former Hope Medical Park Hospital, LLC, to Chapter 7 from Chapter 11, registered creditors of the former hospital and its parent, Carraway Medical Systems, LLC, of Springfield, Mo., will be verified for a final disposition of assets; if any assets remain.
According to filings in U. S. District Court in Texarkana, a meeting of creditors has been set for 10:30 a.m. today at the Texarkana Courtyard by Marriott, 5001 N. Cowhorn Creek Loop, in Texarkana. However, according to the same filing, that meeting may turn out to be a mere formality of attorneys involved.
While representatives of creditors are required to attend the meeting, creditor parties themselves are not required to attend, according to the amended notice filed July 17. That is, in part, because of the circumstances regarding the assets of the former hospital and its owners, as stated in the notice.
“There does not appear to be any property available to the trustee to pay creditors,” the filing states. “You therefore should not file a proof of claim at this time. If it later appears that assets are available to pay creditors, you will be sent another notice telling you that you may file a proof of claim and telling you the deadline for filing your proof of claim.”
As of June, only about $289,000 had been recovered of the more than $7 million in cash assets known to have been in bank accounts related to the former Medical Park Hospital, according to the Little Rock attorney who had been in charge of recovering those assets for the former hospital. Any further determination as to recovery of assets now rests with U. S. Bankruptcy Trustee through its attorney, Patricia Stanley, of Little Rock.
Stanley said in a telephone interview that she was not authorized to comment on the prospect for recovery of any assets.
“What I can tell you is that is decided by the U. S. Trustee,” she said.
U. S. Bankruptcy Judge James Mixon ordered the transition of the proceedings from Chapter 11 to Chapter 7 in a July 12 filing that settled the original bankruptcy proceeding.
A total of 690 creditors have filed original claims against the hospital and its former owners, including 31 Hope businesses, 14 hospital employees (including owners James Cheek, Herschel Brieg, and Teddy Cheek), three local government entities, three Hope doctors, one local Hope school and one Hope charity.
Under a July, 2012, order by Mixon, Medical Park Hospital ceased to exist, and HMPH, LLC, sold its assets to IASIS Finance, Inc., parent company of Wadley Regional Medical Center in Texarkana, which has since owned and operated the hospital as Wadley Regional Medical Center at Hope.
In January, Mixon ordered Arvest Bank of Little Rock, BancorpSouth of Little Rock, and Carraway Medical Systems, LLC, of Springfield, Mo., to surrender for examination all banking and business records held by both banks and Carraway relating to the banking and business dealings of Teddy R. Cheek, James A. Cheek, Herschel Brieg, Wayne Cheek, Scott Cheek, Carraway Medical Systems LLC, Healthcare Staffing LLC, CBC Capital LLC, Golden Care LLC, and Cardio Dynamics.
Page 2 of 2 - Carraway, its predecessor Shiloh Health Systems LLC, and businesses owned by James Cheek, Brieg, and Dudley Bell, including Healthcare Staffing LLC, have also filed claims against the assets of the hospital.
In filings before Mixon, former hospital attorney James Smith, of Little Rock, specifically alleged that, “In the years prior to the filing of this chapter 11 case, large sums of money were transferred without explanation or, it appears from the available business records, without legitimate basis for the transfers.”
Smith specifically alleged, at that time, that Carraway was the key to the looting of Medical Park's assets by its former owners.