Quorum Health, the struggling spin-off company of Community Health Systems that owns or leases largely rural hospitals, is letting go of two of its facilities, the company has announced.
Quorum will sell 64-bed Sandhills Regional Medical Center in Hamlet, North Carolina to FirstHealth of the Carolinas. Terms of the agreement were not disclosed, and the deal is expected to close around December 1, pending regulatory approval.
Earlier this month, they signed a definitive agreement to sell the 56-bed Barrow Regional Medical Center, located in Winder, Georgia, and its associated assets to Northeast Georgia Health System. That deal is scheduled to close December 31, also pending the standard approvals.
The company has made no secret of their need to reduce debt, nor has their former parent company Community Health Systems, who has also sold off a stream of hospitals in recent months to improve their financial outlook. For Quorum, these deals are being touted as in line with that mission.
"We continue to move forward in executing our strategy and this announcement marks our second definitive agreement in that effort," said Thomas D. Miller, President and Chief Executive Officer of Quorum Health Corporation. "We are working toward additional divestitures in our efforts to improve organizational performance and reduce our debt."
Debt isn't the only thing weighing Quorum Health down. The spin-off that spawned the company is mired in controversy, and legal issues. In September, a class-action lawsuit was filed in U.S. District Court for the Middle District of Tennessee by law firm Ryan & Maniskas on behalf of those that purchased the common stock of CHS spin-off Quorum Health Corp.
The complaint alleges that Quorum and certain of its executive officers made false and misleading statements, and/or failed to disclose to investors that many of Quorum's hospitals were underperforming at the time of the spin-off as well as other "indicators of impairment" that were present at the time. It also alleges Quorum failed to inform investors about the issues, rendering Quorum's public statements "materially false and misleading."
A number of law firms have piled on, seeing claimants to join the class-action suit filed against the company, according to published reports.