Mercy Hospital in Iowa City strongly denies the claims made by its main lender, Preston Hollow Community Capital, suggesting that the hospital is facing a severe financial crisis. They view these claims as unacceptable threats that could harm the hospital’s longstanding reputation.

Preston Hollow Community Capital, which serves as a lender and bondholder for Mercy Hospital-Iowa City, has taken legal action to appoint a receiver to protect the hospital’s assets. Additionally, they have made public statements alleging that the hospital has violated loan agreements and resisted implementing a new financial strategy to improve its outlook.

According to Preston Hollow, Mercy Hospital is experiencing a significant decline in its financial health and is heading towards insolvency, forecasting an inability to cover day-to-day operating expenses by the end of September.

However, in a written response issued by Mercy, they dismiss this portrayal as a “false narrative.” The hospital states that its board has been actively engaging with Preston Hollow to address the debt restructuring and emphasizes their willingness to work collaboratively. They express disappointment that Preston Hollow chose to communicate with the media instead of engaging directly with the hospital’s leadership.

Mercy’s management reveals that Preston Hollow had requested a meeting with the hospital’s board members, which was initially scheduled to take place in Iowa City. The purpose of this meeting was to reestablish a cooperative dialogue between the parties. However, Preston Hollow canceled the meeting and proceeded to release its statement to the media about the court action they were pursuing to place Mercy under receivership, catching Mercy by surprise.

Mercy Hospital asserts that it has been diligently meeting all principal and interest payments associated with Preston Hollow’s loans and is up-to-date on bond payments. They maintain their commitment to address the financial challenges constructively and find a mutually beneficial solution.