Mercy Hospital is now in post-sale liquidation mode, with Dan R. Childers administering the Mercy Hospital Liquidation Trust, collecting accounts receivable, resolving claims, and pursuing preference and avoidance recoveries while the operating hospital business is no longer the restructuring center of gravity. The case began on August 7, 2023, when Mercy Hospital and affiliates filed Chapter 11 after a liquidity and governance crisis tied to COVID-era volume declines, revenue-cycle disruption from a March 2022 electronic medical-record conversion, more than $62 million of secured bond debt, a pension shortfall, and an escalating dispute with Preston Hollow that culminated in a state-court receivership action, as described in the Toney first-day declarationDkt. 27.
The restructuring path shifted from preserving hospital operations to a liquidation framework. The debtors’ capital structure included approximately $37.9 million of 2018 health facilities revenue bonds and $24.3 million of 2011 bonds, both secured under the master trust structure, plus roughly $141 million of pension obligations, all sourced to the Toney first-day declarationDkt. 27. By March 2024, the filed path was a joint Chapter 11 liquidation plan through the Modified Disclosure Statement and Joint Chapter 11 Plan of LiquidationDkt. 871, leaving estate administration, claims reconciliation, and litigation recoveries as the main value drivers.
The current docket reflects that posture: the trustee’s latest quarterly reporting shows the trust ended March 31, 2026 with about $6.18 million in cash after receipts that included preference recoveries, foundation funds, and continuing AR collections, while disbursements were mainly professional, transition-service, oversight, and collection costs under the . The trust is also monetizing litigation and settlements, including 2025 adversary complaints against vendors such as Intuitive Surgical, Hologic, De Lage Landen, and J & K PMS through preference or fraudulent-transfer theories. The court held a May 5, 2026 status conference with no substantive new deadlines reflected in the , and the most recent docket activity is administrative, including counsel withdrawal granted on May 21, 2026 in the .
