District Judge John Kane on Feb. 27 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 2018, 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. 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 prohibited the defendants from doing anything to interfere with the receiver’s assumption of control over the hospital.
A case record indicates the injunction bond and the receiver’s bond were posted with the court on March 4.
The transition to receivership temporarily slowed down county commissioners Monday, as they sought to gather necessary details before potentially approving an agreement for the Fairfax hospital to provide X-rays for the Osage County Health Department. The commissioners’ discussion Monday indicated the health department has been receiving services for several months without a contract formally in place. The county board tabled its contract consideration until district attorney Mike Fisher can provide additional information.