Owners close Audrain County hospital, pledge to reopen
MEXICO, Mo. (KMIZ)
The owners of Audrain Community Hospital in Mexico laid off much of their staff Wednesday and closed the facility.
The company that operates the hospital, ZivaMed, called the move a "temporary pause" in operations in a news release Thursday. Staff were told about the decision last week.
ZivaMed did not say how many people were laid off but said the security and facilities team will stay in place. Employees were provided with severance, the company says in the release.
"The Mexico hospital's owners blamed the closure on delays in its bankruptcy proceedings," the company said in its release. "Because of a legal and financial mess left by prior owners, the current owners of the Audrain Hospital campus had to go to bankruptcy Court. Once that Court approves a reorganization plan, ZivaMed can restart the process of opening up a hospital.
"Based on the indications by the Court, ZivaMed was expecting the reorganization plan to be approved last November (or, worse case, by the end of the year). Based on that, the company started hiring people in the summer so it would be able to hit the ground running."
The main reason for the delay is a lawsuit by former employees of Noble Health, which used to own the hospital.
ZivaMed CEO Amanda Shurtz was moved to an advisory role as part of the pause in operations, the company says.
“We’ve had to pause our push to get the hospital up and running mainly due to a lawsuit by former Noble employees who are asking us to clean up the sins of the former owners, with whom we have no affiliation,” ZivaMed co-owner Gary Greenstein says in the release. “On a human level, we empathize with the former employees of Noble, as they were seriously wronged. But this is unfortunately delaying our ability to start operations and keep our team employed.”
ZivaMed is the latest in a string of owners a the struggling rural hospital over the past few years.
The former Noble employees at the Mexico hospital and another in Fulton allege in a filing in the company's bankruptcy suit that Noble failed to pay their insurance premiums, leading to uncovered claims, and failed to pay them.
Check back for updates to this developing story.
