Officials say the collections for the Natchez Regional Medical Center bankruptcy settlement are holding steady, but the question of what will happen with former employees’ retirement accounts is still unanswered.
The formerly county-owned hospital filed for bankruptcy protection March 26, 2014, after operating in a deficit of millions of dollars.
The case was settled in October when the hospital was sold to Community Health Systems for $10 million. An arrangement for the company to pre-pay $8 million in taxes was necessary to cover the hospital’s debts, and by the time the case was closed, Adams County had to take out a $3 million loan to cover closing costs.
Approximately $4 million of the proceeds had to be placed in an escrow account for two years in case Medicaid and Medicare audits result in the clawback of funds previously remitted to the hospital.
One of the notable unsecured creditors in the filing was the Mississippi Public Employee Retirement System.
While employees continued to make contributions toward PERS, from November 2014 until the bankruptcy filing the hospital did not remit the employer portion of the payments. Under the PERS system, employers make a 15-percent match to employee contributions.