Wadley Regional Unveils Its Plans for Hope Project

by Mark Friedman  on Monday, Oct. 29, 2012 12:00 am  

New owners are investing $2.6 million to restore the fortunes of Wadley Regional Medical Center at Hope.

Between March 2006 and May 2008, Cheek and Breig should have forwarded the $1.86 million in taxes they withheld from hospital employees to the Internal Revenue Service. Instead, according to the indictment, they kept the money.

They both pleaded guilty, and on June 15, they were sentenced to five years in federal prison and three years of probation. They were ordered to pay $5 million in restitution and a fine of $10,000.

Pushed Into Bankruptcy

While Cheek and Breig were committing their crimes, the Hope hospital was racking up millions of dollars in debts.

Wadley Regional had “provided the struggling hospital with interim financing to help the facility pay employees, bills and other expenses necessary to maintain day-to-day operations during the bankruptcy proceedings,” according to a hospital news release on July 16.

When Hope Medical filed for Chapter 11 reorganization in May, it reported $19.7 million in debt and $19.5 million in assets. One of the biggest debts was a $5 million claim from the IRS.

The hospital’s assets included $6.7 million in accounts receivables, but only 22 percent of those are believed to be collectible, the bankruptcy filing said.

From Jan. 1 through Aug. 31, Hope Hospital posted a $5.7 million loss, according to the hospital’s bankruptcy records.

In 2011, Hope reported a loss of $3.25 million on patient revenue of $63.5 million. In 2010, it reported net income of $123,365 on patient revenue of $71.1 million. n



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