Though Weaver's 20-page order takes MMC Holdings-Oklahoma Healthcare Systems a few steps further toward purchasing the bankrupt hospital, it also reveals more details surrounding the hospital's bankruptcy, including the funds owed to HCI and the fact the Moore hospital -- despite continuing to generate millions in revenue -- could be forced to close its doors by the end of February if a buyer isn't found.

In his order, Weaver outlined the hospital's rapidly deteriorating financial health.

"The debtor (the hospital) has a post petition negative cash flow of more than $5 million to date," Weaver wrote. "And a total negative cashflow of $7 million is anticipated by Feb. 28."

The facility, the judge said, is currently operating with a $7 million loan from Hall Financial. "It is by no means certain that the debtor can obtain further debtor-in-possession financing from Hall once the present $7 million commitment is fully used," Weaver wrote.

Further, before the hospital's sale can be completed, administrators and the hospital's new buyer must receive approval from the Oklahoma Department of Health. That process, court documents show, requires 30 days.

"Therefore it is imperative that any proposed purchaser file change of ownership paperwork with the Oklahoma Department of Health by no later than Jan. 28, so the debtor can close before it runs out of cash," the judge said.

Court filings show that HCI's collateral includes the Moore hospital's accounts receivable -- before the bankruptcy petition -- along with the facility's provider agreements with Medicare and Medicaid, the hospital's contract with third-party payers such as Blue Cross, Aetna and United Healthcare, the original accounting, medical and patient records, the rights the hospital has with third-party collection agencies and its billing software.

"The settlement impacts the ability of creditors and other parties to pursue claims of the estate against HCI or to contest HCI's security interest," Weaver wrote. "In the event the debtor is unable to consummate a sale or otherwise pay off HCI under the settlement agreement, HCI will be entitled to foreclose on the HCI collateral and receive all of the relief requested."

Should that happen, Weaver said, "the debtor will necessarily cease operations and the case will most likely be converted to one under Chapter 7 of the Bankruptcy Code."

Built in 2005, the Moore Medical Center is one of six rural hospitals owned by The Schuster Group, an Oklahoma City healthcare company. Like the Moore hospital, the Schuster Group filed for bankruptcy protection late last year.

M. Scott Carter 366-3545 scarter@normantranscript.com