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Residents question future of East Ohio Regional Hospital after bankruptcy filing; city says property taxes and utility liens remain
Summary
Citizens raised concerns about the hospital’s reopening after a bankruptcy filing; city officials said property taxes are secured liens and the city has placed utility liens where applicable, but the municipal position in bankruptcy proceedings is not as a secured creditor.
Residents asked the Martins Ferry City Council for updates on East Ohio Regional Hospital’s reopening and the city’s exposure after a recent bankruptcy filing involving hospital owners.
At the meeting, citizen Richard Horn asked whether the hospital’s announced reopening timeline had slipped; council members and staff said the city had no recent updates on reopening plans and noted the hospital’s owners filed for bankruptcy the previous Friday. “Friday, bankruptcy was filed against the hospital,” Horn said. “That means it may not open?”
City Auditor/Finance staff said the city’s general position in a bankruptcy will depend on proceedings, but property taxes are secured by lien and do not simply disappear. “Generally, yes,” the city’s finance official said when describing how tax claims are handled in bankruptcy; the city also said it has placed liens related to utilities where appropriate.
A resident with the Steelworkers asked whether the city would be a secured creditor for unpaid taxes; city staff replied that the city is not a secured creditor in the typical sale process but that property taxes are recorded as liens and should be paid when the property is sold. “Once they buy and pay the taxes… taxes are gonna be paid,” staff said, and the city has the ability to place liens for utilities and taxes as needed.
Council directed staff to continue monitoring the bankruptcy process and to report changes, but no formal city action authorizing litigation, tax forgiveness or a specific course of action was recorded at the meeting.
The council also noted that the city has outstanding liens for eight utilities and would follow the ordinary processes for asserting its claims in bankruptcy, but staff cautioned complexities can arise in insolvency proceedings and that outcomes depend on the bankruptcy court and any sale process.
No dates for property sale, reopening or creditor hearings were provided in the meeting record excerpt.
