An auction in early November to save a bankrupt Texas hospital has proved to be successful, with Columbia Medical Center of Plano Subsidiary, L.P., a wholly-owned subsidiary of HCA Healthcare, agreeing to acquire it for $41 million in cash.

HCA Healthcare, the largest for-profit healthcare system in the U.S., got the green light on November 29 from the Bankruptcy Court for the Northern District of Texas to proceed with the acquisition of Trinity Regional Hospital Sachse, a full-service nonprofit hospital near Dallas, reported Bloomberg Law.

Trinity Regional Hospital Sachse filed for bankruptcy in August two years after opening. The owners of the 32-bed facility borrowed $68 million in municipal bonds in 2020 to open it, telling investors that the fast-growing population northeast of Dallas would flock to it after two other hospitals closed down, and that its proximity to a new highway and inclusion of doctors’ offices and an outpatient surgery center would make it an attractive care site.

Instead, it has defaulted on its municipal bonds, and its parent entity reported $100 million in assets, paired with liabilities of as much as $500 million in the bankruptcy petition, according to Bloomberg Law.

“It completely encompasses all of the complexities and bureaucracy and patient care issues in one small community hospital,” Jon Nash, the chief restructuring officer for the hospital and managing partner at MeadowLark Advisors, a firm hired by the hospital to help it find a potential buyer, told The Dallas Morning News back in August.

Much of the hospital’s troubles come down to the way it was financed, with unrated bonds that have yields ranging from 6% to 15%. Right before construction, a $15 million investor pulled out at the last minute, leaving it with a funding deficiency that was compounded further by the pandemic. COVID-19 also led to a shortage of physicians, which limited the number of patients it could see. Additionally, its ICU had to be renovated after being constructed incorrectly, setting it back financially and in terms of care.

The pursuit to find a buyer, which began a year after opening, has been a struggle, with prospective buyers turned off by $2 million annual land lease payments.

The hospital is equipped to provide surgical services and inpatient and outpatient care, and has an emergency department. It also has radiologists for performing and reading radiology scans.

The deal with HCA Healthcare is expected to be completed in January 2024.

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