Half of hospital staff laid off

• By GREG GARLAND
• Advocate Westside bureau
• Published: Feb 18, 2009 - UPDATED: 12:15 a.m.

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PLAQUEMINE — The owner of financially troubled River West Medical Center has laid off about half of the hospital’s staff in a cost-cutting move he says is aimed at keeping the hospital open for business.

James R. Cheek, principal owner and chief executive of Springfield, Mo.-based Shiloh Health Services Inc., said Tuesday the hospital has too few patients to support a staff of 200 full- and part-time workers.

About half the employees at the Iberville Parish hospital were discharged Monday, he said.

In his first extended interview since firing the hospital’s chief executive officer and assuming control, Cheek said he expects the 80-bed hospital to remain open, but possibly under management of new owners.

The hospital bounced payroll checks for about 60 employees last month and is now embroiled in bankruptcy proceedings, raising questions about its future. The state Department of Health and Hospitals advanced $150,000 to River West so it could meet a recent payroll.

Cheek’s business history shows that in June 1989, the U.S. Securities and Exchange Commission censured him for providing “false and misleading” information to investors in one of his companies. Cheek said in response that no fine was imposed.

Several of Cheek’s business ventures also have done poorly and ended up in bankruptcy, records show.

That was the case with Highland Community Hospital in Lubbock, Texas. Purchased in March 2006 by an investment group headed by Cheek, it filed for Chapter 11 reorganization protection under the federal Bankruptcy Code in May.

Records filed in U.S. Bankruptcy Court in Lubbock show the hospital owed more than 200 creditors $10 million or more when the case was filed. The hospital has since been purchased by a group of doctors.

“Subsequent to the purchase and for the two-year period leading up to the bankruptcy, the Debtor never had sufficient capital to fund its operations,” the bankruptcy filing states.

Cheek’s group bought the 123-bed Lubbock hospital from Brentwood, Tenn.-based Community Health Systems with little money down, according to papers filed in the bankruptcy case.

Cheek said a similar financial transaction was employed to buy River West. The Plaquemine hospital, too, was purchased from Community Health Systems.

He described his company as a “buyer of last resort” of troubled health-care businesses that are often on the verge of closing.