WOONSOCKET, R.I. (WPRI) - Struggling Landmark Medical Center's would-be buyer is apparently backing out of the deal for good.
The lawyer overseeing Landmark revealed on Tuesday that he no longer expects Boston-based Steward Health Care System, which has been in talks to buy the cash-strapped hospital since 2009, to go through with the transaction.
"In view of the apparent withdrawal of Steward Healthcare as the purchaser of the hospital assets, it is essential that the Special Master have additional time to negotiate a sale to another purchaser," Jonathan Savage, Landmark's court-appointed special master, wrote in a court filing.
Landmark spokesman Bill Fischer confirmed Wednesday that Savage is now in discussions with other potential buyers who could purchase the hospital to keep it open. Landmark has been in receivership, the state-law equivalent of bankruptcy, since 2008.
"Obviously the special master did not write those words lightly," Fischer told WPRI.com when asked about Savage's court filing regarding Steward. "They have not formally withdrawn but we've got to prepare - and have been preparing - a Plan B if this scenario unfolds."
Steward spokesman Christopher Murphy did not respond to an email or a phone message seeking comment. The deadline for the two sides to close on the transaction is Sunday under terms set by Attorney General Peter Kilmartin's office, which has given extensions and
attempted to keep the deal on track.
"We want the patients and employees to know that a backup plan - if necessary - is well under way, and that we remain confident that an acquisition can be completed to achieve the goal of preserving Landmark," Fischer said. He declined to identify the potential buyers but said more information may be released "in the coming days."
Savage will seek instructions on how to proceed from Superior Court Judge Michael Silverstein, who is overseeing Landmark's receivership, if the deadline passes and Steward is no longer in the picture, according to Fischer.
Landmark has about 1,100 employees between the main hospital and its sister institution the Rehabilitation Hospital of Rhode Island. The company currently has about $6.5 million in cash on hand, but $5.5 million of that is set aside to pay the state's hospital licensing fee.
R.I. Tax Administrator David Sullivan filed a court motion last month demanding that Landmark pay the state $6.1 million, which would cover both the overdue licensing fee and a penalty. Savage is asking the court to deny Sullivan's request in order to preserve the hospital's financial options. A hearing is set for Oct. 5.
"Given cash projections, immediate payment of the license tax would leave the hospital in an extremely precarious position, and would greatly hasten its demise," Savage wrote in Tuesday's court filing. He also argued Landmark's closing would hurt the state more than a delayed payment of the fee.
Landmark's plight has drawn attention from a long list of Rhode Island politicians, and lawmakers recently approved changes to the state's hospital-purchase law at Steward's behest.
"Landmark Medical Center is a vital health care facility for Northern Rhode Islanders who need urgent care," Congressman David Cicilline, who represents Woonsocket, said in a recent statement.
A separate dispute involving Landmark was resolved earlier this month when the hospital reached an agreement with Blue Cross & Blue Shield of Rhode Island, the state's largest health insurer, to rejoin its network of providers.