NACOGDOCHES, Texas — Lion Star, the private company that has operated the Nacogdoches Memorial Hospital since 2021, has agreed to return control of the hospital to the Nacogdoches County Hospital District following clinic closure announcements amid an ongoing bankruptcy case.
This comes after Lion Star announced on the Nacogdoches Memorial website this week that clinics like Care First Women’s Health in Nacogdoches and Care First Garrison Clinic would be closing for business by March 23.
In a statement released Thursday, the Nacogdoches County Hospital District said the lawyers for the district and other stakeholders' counsel agreed to terms in a court order to give the hospital back over to the district. There will be a short 15-day transition period and NCHD will then take over all hospital operations.
Through the statement, the hospital district also revealed it intends to continue full operations, including at the clinics in Nacogdoches and Garrison.
"Due to the severity of the situation, the district, as promised, used all available resources to return the hospital to the citizens of Nacogdoches County," the statement read. "We appreciate the patience and understanding of the medical staff, physicians, and the community during the difficult bankruptcy proceedings. We look forward to reestablishing relationships with the hospital's medical staff, physicians, and vendors as we work together to provide quality health care and services."
A hearing is set for Monday in the federal bankruptcy court in Fort Worth for the order about control of the hospital, NCHD said.
In November, Lion Star filed a petition in U.S. bankruptcy court of the Northern District of Texas saying the company owes $10 million and $50 million to an estimated 200 to 999 creditors. The bankruptcy filing happened after the Nacogdoches County Hospital District board voted to terminate the 10-year lease agreement with Lion Star.
In a report filed Thursday for the bankruptcy lawsuit, an ombudsman’s report showed Lion Star was laying off employees and had plans to close some of the hospital system's clinics.
The ombudsman noted in her report that a closure of the women's clinic would create concerns for "high-risk obstetrical patients." She also said if the Garrison clinic closed, there would be potential transportation challenges for current patients.
The report mentioned one clinic that had its power shut off as a result of the bankruptcy.
"To the credit of the clinic staff and clinician, they continued to serve patients in the 4-5-hour period that it took for power to resume, utilizing flashlights and porch power access for essential equipment," the report read.
Leadership at Lion Sar assured the clinic clinician that the shutoff was not money related, saying the company had "plenty of money." But two days later, the team was notified that their clinic would be closing, according to the report.
The ombudsman said the clinic closures would be concerning to patients' safety. She described Lion Star's operational situation as "uncertain."