District Judge John Kane on Wednesday determined the Fairfax Community Hospital was insolvent and ordered the facility placed in receivership.
“The court finds that the hospital is insolvent and that an immediate threat to the health and safety of current and future patients exists,” Kane wrote in a court document regarding a hearing he held based on a request by the town of Fairfax for a temporary injunction and the appointment of a receiver.
The town made its request as an element of civil litigation it has brought against corporate interests controlling the hospital. The town of Fairfax filed suit in December, seeking the return of the hospital to municipal control. The lawsuit alleged breach of contract and deceit by the parties operating the hospital.
On more than one occasion in recent months, pay day has come and gone at Fairfax Community Hospital with employees not having received their pay.
Kane determined that “immediate and irreparable injury to plaintiffs will occur if no relief is granted,” and he agreed to issue the temporary injunction the town had requested. Kane named Fairfax Healthcare Authority, a municipal trust authority, to be the receiver and take over operation of Fairfax Community Hospital.
Charlie Cartwright, a member of the town’s five-person governing board, said the town board created the Fairfax Healthcare Authority under the umbrella of town government. The fight is not over, however, as the lawsuit will continue.
Cartwright said hospital employees were not paid on Feb. 15, and he has picked up indications that the hospital may be on course to miss another pay day Friday. He emphasized it is very important for the town to comply with everything in Kane’s order and to protect the hospital as an asset. Once that is done, conditions can be improved for employees and patients, he said.
The judge held the hearing on an expedited basis, over the objection of attorney Peter Brolick, who represents some of the defendants in the lawsuit brought by the town. In his order appointing a receiver, Kane expressly probibited the defendants from doing anything to interfere with the receiver’s assumption of control over the hospital.