- Associated Press - Sunday, December 20, 2015

EL PASO, Texas (AP) - El Paso County has accused a consulting firm of mismanaging a children’s hospital up to and during its bankruptcy and has asked a judge to deny a request by the firm for almost $800,000 in fees.

Earlier this month, a judge approved a plan for El Paso Children’s Hospital to emerge from bankruptcy.

The county is disputing the fees being claimed by AlixPartners, which ran the hospital, and the law firm representing AlixPartners, the El Paso Times reported (https://bit.ly/1J0XTFT ) Sunday.

The fee dispute will be heard Tuesday in U.S. Bankruptcy Court in Austin.

El Paso County Judge Veronica Escobar has said that the hospital’s former board and the professionals advising it dragged the hospital through an expensive bankruptcy only to end up with a settlement that is similar to one that was on the table in summer 2014.

In a Dec. 9 court filing, the county argued AlixPartners’ billing records show it did little in the months leading up to the May 19 bankruptcy filing to find a partner for the hospital, to renegotiate its vendor contracts or otherwise improve its dismal financial outlook.

In a monthly operating report filed this week with the court, the hospital said it lost $2.4 million in October. Subtracting rent that the hospital is now paying, the hospital lost only a little less than it had in its first month of bankruptcy.

“However, during this period, (AlixPartners and its management) did decide to cease paying (Children’s Hospital) vendors . so that the accounts payable rose from $1,906,000 to $4,865,000,” according to the county’s court filing. “Each failure to timely pay a vendor caused a breach of contract against” the hospital.

AlixPartners said that it brought great expertise to the hospital before and during the bankruptcy.

“Upon the Chapter 11 filing, the Debtor relied on (AlixPartners’) experience to assist with retaining the support of physicians, staff, patients, vendors, lenders and other key stakeholders,” AlixPartners said in court documents.


Information from: El Paso Times, https://www.elpasotimes.com

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