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Sale of St. Louis hospital inches closer

A bankruptcy judge last week approved new terms for the sale of St. Alexius Hospital to SA Hospital Acquisition Group LLC

ST. LOUIS — The sale of a south St. Louis hospital, delayed for months, is now scheduled for this month.

A bankruptcy judge last week approved new terms for the sale of St. Alexius Hospital to SA Hospital Acquisition Group LLC, led by health care executives Ben Klein and Jeff Ahlholm. The hospital is currently owned by Americore Holdings, which filed Chapter 11 bankruptcy in December.

The transaction was previously scheduled to close in August but was held up by a state of Missouri investigation into patient care.

The hospital's trustee, Carol Fox, said in a court hearing that she believed she had resolved any issues with the state, and that closing is scheduled for Nov. 19.

The new sale agreement includes language to address new U.S. Department of Health and Human Services guidance on the use of federal CARES Act funds. St. Alexius got $16.5 million in funds for a program aiding "safety net" hospitals, or those that provide care to individuals regardless of their ability to pay. It was also approved for $5.1 million in Paycheck Protection Program funding, also from the CARES Act.

Under the new agreement, SA Hospital would have to indemnify St. Alexius for any claim from the federal government that expenditures made from Oct. 1 through the closing date do not qualify under the CARES Act.

The agreement also said that St. Alexius could now have its PPP loan forgiven, and that Fox is pursuing that. If the loan isn't forgiven, SA Hospital will have to pay St. Alexius an extra $2.7 million, it said.

Other terms of the sale:

  • An $18.6 million purchase price, including $17.1 million to St. Alexius' estate.
  • SA Hospital will acquire all real and personal property owned by St. Alexius entities, including its Broadway and Jefferson Avenue campuses.
  • It excludes cash on hand at closing and the rights to $2.5 million in proceeds from an agreement between St. Alexius and SSM Health Care for residency slots.

SA Hospital hasn't responded to requests for comment made through its lobbyist.

The bankruptcy of St. Alexius' parent company, Americore, came after numerous lawsuits were filed against it, including in St. Louis, alleging it was not paying critical service providers. 

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