ACTION 8 UPDATE: Jackson Hospital names financial restructuring leader

ACTION 8 UPDATE: Montgomery’s Jackson Hospital & Clinic says it has named a leader to help it with financial restructuring after it missed making a $60 million bond payment last month.

Allen Wilen, a partner with Eisner Advisory Group, has been named Chief Restructuring Officer, according to a statement from the hospital’s board chairman, retired Brig. Gen.  Edward Crowell. He said that Wilen will be joined by Ronald Dreskin, who is the partner in charge of Eisner’s heath care services practice. They will lead a team to help turn around Jackson Hospital’s finances.

As Action 8 News has reported, the hospital’s bond rating was lowered based on the missed payment. S&P Global says it  lowered Jackson’s long-term rating to ‘D’ from ‘CC’ on The Medical Clinic Board of the City of Montgomery’s series 2015 bonds.

It says the payment was due on September 3. S&P Global says that it understands that Jackson’s liquidity is very thin and insufficient to meet the bondholders’ demand for full payment. It says $60 million is the outstanding interest payment for the series 2015 bonds.

Crowell said by having the Eisner Advisory Group working on a financial turnaround, the hospital’s senior leaders can also focus on the hospital’s day-to-day management.

His statement said that for the past month, meetings have taken place with bondholders, insurers, government officials, suppliers and others.

Wilen has taken steps to help the hospital’s cash position, arranging for additional financing as negotiations proceed to “cure the bond interest payment default,” the statement said.

“The cash infusion will provide the liquidity and runway needed for Wilen, Dreskin and the senior leadership team to evaluate operations, devise a strategic plan for recovery and growth and position the hospital for long-term success,” the statement said.

Crowell’s statement said the hospital will remain open and that there has been no change in employment levels.

On its website, Jackson Hospital describes itself as being licensed for 344 beds, serving Montgomery and the River Region as a community not-for-profit facility. It opened in 1946 with 37 beds and five doctors.