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IT IS ORDERED as set forth below:

Date: December 17, 2015

_________________________________
Paul W. Bonapfel
U.S. Bankruptcy Court Judge

_______________________________________________________________

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF GEORGIA
ROME DIVISION

IN RE:
HUTCHESON MEDICAL CENTER, INC.,
et al.,
Debtors.

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CHAPTER 11
Jointly Administered Under
CASE NO. 14-42863-pwb

ORDER APPROVING MANAGEMENT SERVICES AGREEMENT

THIS CAUSE came before the Court at hearing on December 14, 2015 at 10:00 a.m. (the
Hearing) to consider several matters, including, inter alia, the Trustees Motion for Authority
to Sell Assets Free and Clear of Liens, Claims and Encumbrances filed on October 13, 2015 [Doc
367] (the Sale Motion), pursuant to which Ronald L. Glass, the duly appointed Chapter 11
Trustee (the Trustee), sought authority to sell some or all of the assets of the Debtors estates,
including, without limitation, assets (the Hospital Assets) used by the Debtors primarily in
connection with the Hutcheson Medical Center 179-bed acute care hospital (the Hospital). Also
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before the Court at the Hearing was an Emergency Motion for Authority to (A) Enter Into
Management Services Agreement with Peoples Choice Hospital, LLC, (B) to Incur Debt and
Request for Preliminary Hearing filed by the Trustee on December 10, 2015 [Doc 487] (the MSA
Approval Motion), in which the Trustee requested approval to enter into a Management Services
Agreement with Peoples Choice Hospital, LLC (Peoples Choice), in connection with a
proposed sale of Hospital Assets to Peoples Choice. At the Hearing, the Trustee orally amended
the MSA Approval Motion to substitute Oglethorpe Physician Services, LLC (OPS) as the
proposed manager of the Hospital, pending the closing of a proposed sale of the Hospital Assets
to an affiliate of OPS, ValorBridge Partners, LLC (or its permitted designee, Hutcheson
Acquisition Sub, LLC), pursuant to the terms of a Management Services Agreement between the
Trustee and OPS (the Management Agreement), a copy of which is attached hereto as Exhibit
A. The MSA Approval Motion, as amended by the Trustee orally at the Hearing, shall be
referred to herein as the Amended MSA Approval Motion.1
Based on statements of counsel at the Hearing, the record in this case, and for cause shown,
IT IS HERBY ORDERED, ADJUDGED AND DECREED THAT:
1.

The Amended MSA Approval Motion is GRANTED. The Trustee is authorized to

enter into the Management Agreement, which is approved in all respects as if set forth herein
verbatim.
2.

Subject to the terms of the Management Agreement, OPS shall be responsible for

paying all expenses related to the operation of the Hospital during the Term; provided, that in no
event shall OPS be obligated to pay (i) any costs or expenses of administration of these Bankruptcy

Capitalized terms used in this Order but not otherwise defined herein shall have the meanings ascribed to
them in the Management Agreement.
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Cases, including the fees and expenses of professional persons or other estate-retained persons or
entities, the Trustee, or the Office of the U.S. Trustee, (ii) any administrative expense claims
arising or accruing prior to the Effective Date, (iii) any administrative expense claims relating to
or arising out of the Nursing Home, the Surgery Center, the Ancillary Businesses, or any other
Excluded Assets under the APA (as defined in the APA).
3.

As consideration for Regions Banks (Regions) consent to the Trustee and OPS

entering into the Management Agreement, (a) if Regions or its designee applies for one or more
CONs to authorize operation of the ambulatory surgery center and cancer center (collectively, the
Surgery Center) located at 4750 Battlefield Parkway, Ringgold, Georgia 30736, with such
services as are currently authorized under the Hospitals existing CON, but as a free-standing
multi-specialty surgery center and radiation therapy service provider with a linear accelerator (the
Regions Application), then neither the Trustee nor OPS or any of its affiliates will oppose the
Regions Application, and they will use commercially reasonable efforts to support it (but neither
the Trustee nor OPS or its affiliates shall be required to incur any out of pocket expense in
connection with such support); and (b) during the Term of the Management Agreement, neither
the Trustee nor OPS nor any of its affiliates will apply for a new CON to operate a free-standing,
multi-specialty ambulatory surgery facility within Region 1 of Georgias Health Planning Area for
ambulatory surgery centers or to provide radiation therapy services with a linear accelerator or
similar radiation cancer treatment services within Georgias State Service Delivery Region 1 for
Non-Special MegaVoltage Radiation Therapy Services.
4.

Promptly after the Effective Date of the Management Agreement, the Trustee will

use his best efforts to terminate the operating letters of credit that have been provided by Regions
as security for insurance policies issued by Safety National in the amount of $1,050,000 and
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Cincinnati Insurance in the amount of $183,042 when such insurance is no longer reasonably
required or when either the insurance or the letters of credit expire in accordance with their
respective terms. OPS will provide similar insurance to cover all claims arising from and after the
Effective Date. OPS shall provide Regions Bank with reasonable access to its collateral prior to
the closing of the APA.
5.

Except to the extent otherwise provided under the DIP Financing with the DIP

Lender, none of the fees or expenses due and owing under the Management Agreement, nor any
of the expenses incurred after the Agreement Date of the Management Agreement related to the
operation of the Hospital, shall be paid from Regions cash collateral or otherwise surcharged
against Regions collateral under Section 506(c) of the Bankruptcy Code or any other applicable
law.
6.

The rights and protections granted to Regions under this Order shall survive

termination of the Management Agreement. Further, in the event of a violation of the terms of this
Order with respect to the rights and protections granted to Regions, Regions shall be entitled to
entry of an order to show cause against the party who violated the Order, an order directing specific
performance of its rights and protections hereunder, and any other remedy available at law or in
equity, including, without limitation, damages resulting from said violation.
7.

This is a final order and is enforceable upon entry by the Clerk of the Court. To

the extent necessary under the Federal Rules of Bankruptcy Procedure 5003, 9014, 9021 and 9002,
this Court expressly finds that there is no just reason for delay in the implementation of this Order
and expressly directs entry of judgment as set forth herein and the stay of Federal Rules of
Bankruptcy Procedure Rules 6004(h) is hereby waived, modified and shall not apply to the

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proposed Management Agreement, and the Trustee is authorized to take all actions and enter into
all transactions authorized by this Order immediately.
[END OF DOCUMENT]
Prepared and Submitted by:
SCROGGINS & WILLIAMSON, P.C.
/s/ J. Robert Williamson
J. ROBERT WILLIAMSON
Georgia Bar No. 765214
J. HAYDEN KEPNER, JR.
Georgia Bar No. 416616
1500 Candler Building
127 Peachtree Street, NE
Atlanta, Georgia 30303
T: (404) 893-3880
F: (404) 893-3886
E: rwilliamson@swlawfirm.com
hkepner@swlawfirm.com
Special Counsel for the Chapter 11 Trustee

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Distribution List
J. Robert Williamson
J. Hayden Kepner, Jr.
Scroggins & Williamson, P.C.
1500 Candler Building
127 Peachtree Street, NE
Atlanta, GA 30303
Martin P. Ochs
Office of the United States Trustee
362 Richard Russell Building
75 Ted Turner Drive, SW
Atlanta, GA 30303-3315
David B. Kurzweil
Greenberg Traurig, LLP
3333 Piedmont Road, NE, Suite 2500
Atlanta, GA 30303
Erich N. Durlacher
Burr & Forman, LLP
Suite 1100, 171 17th Street NW
Atlanta, GA 30363
David E. Lemke
Waller Landsden Dortch & Davis, LLP
511 Union Street, Suite 2700
Nashville, TN 37219
Jonathan T. Edwards
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, GA 30309-3424

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