Pot-focused bank favorite to acquire Ellwood City center
A cannabis-focused investment bank in California has emerged as a frontrunner to acquire the former Ellwood City Medical Center out of bankruptcy.
Newport Beach, Calif.-based Pelorus Equity Group Inc., which holds first and second mortgages on the closed medical center, is poised to acquire all of the medical center’s assets, according to recent bankruptcy court filings.
Pelorus has indicated an interest in reopening the medical center as an acute care hospital, according to R. Aaron Hostettler, a London, Ky., lawyer who is representing Ellwood City Borough in the reorganization of hospital owner Americore Holdings LLC under Chapter 11 of the U.S. Bankruptcy Code.
Pelorus, Americore’s biggest creditor, is owed about $10 million.
The Beaver County Times reported that Pelorus has offered a credit bid of $587,477 for Ellwood City Medical Center, its accounts and accounts receivable and a minimum $2.53 million for the medical center’s real estate assets, with the option of increasing its bid if a higher offer is received.
The case is being heard in the U.S. Bankruptcy Court for the Eastern District of Kentucky. A date for the sale of the medical center has not been set.
Pelorus CEO Dan Leimel didn’t return calls seeking comment.
Pelorus gets cannabis-cultivation processing and related operations up and running by loaning money to property owners who seek to lease space for cannabisrelated businesses. One option for the company is to partner with a local health system in reopening Ellwood City Medical Center, if its bid is approved by the court.
In years past, partnerships between Ellwood City Medical Center, Butler Health System and a predecessor hospital system to Allegheny Health Network each collapsed. Some 228,000 people live within 15 miles of Ellwood City, a former industrial town located 41 miles north of Pittsburgh, according to borough statistics, but it’s uncertain whether the market would financially support a small hospital.
UPMC Jameson Hospital is located just 14 miles away in New Castle, and the 40-hospital UPMC system is far better funded than a tiny, standalone hospital. The 62bed Ellwood City Medical Center traces its beginnings to 1913.
Ellwood City Mayor Anthony Court said he, members of council and others have been “working diligently to resurrect this hospital” since its closing in December due to the parent company’s financial difficulties. Reopening would include getting an operating license from the state Department of Health.
Americore Holdings owes Ellwood City Borough, Ellwood City Area School District and other municipal entities nearly $500,000 in back taxes, utilities and electric service, which the borough provides, Mr. Court said.
Along with members of council and others, “we have worked diligently to resurrect this hospital,” Mr. Court said. “As of now, nothing has changed, which is not a bad thing.”