Council Takes Step to Recoup Funds Owed by Former Medical Center

Ellwood City Borough Council unanimously approved a resolution to collect $450,000 in delinquent utility bills and taxes owed by the former Ellwood City Medical Center.

Pelorus Equity Group Inc. is the current owner of that debt.

“This is a good step forward toward resolution with this property,” said Borough Manager David Allen.

Allen explained that this is simply the first step in the process to regain the delinquent funds. The next step, he said is Federal Court.

This step by the borough follows an October 29, 2021 Ellwood City Area School District Board of Directors vote to accept a delinquent tax payment plan for the property.

The board agreed to a payment of $335,000 of the back taxes owed through Pelorus.

Not all ECASD board members were in favor of the move. Board members Erica Gray, Jennifer Tomon and Claire Fauzey voted against the motion. For Tomon and Gray, the amount was not suitable as it is nearly half of what was owed. Tomon felt it was unfair to the community and former employees of the medical center.

A final resolution has been a long time coming. On January 20, 2020, in a unanimous vote, council hired the law firm Hamm, Milby & Ridings, PLLC out of London, KY, as representation in the Ellwood City Medical Center bankruptcy filing. At that time the city was seeking $300,000 in unpaid electric and sewage charges as well as $100,000 in property taxes that the Medical Center racked up before closing its doors on December 10, 2020. The closure of the facility came after the state Department of Health shut down its emergency room and inpatient services on November 27, 2020 for serious violations.

Since that time the community has been rallying for answers to many questions including what exactly the future holds for the medical center.

The community had thought their hopes and prayers were going to be answered in 2017 when a deal was inked with Americore Health, a company that touted itself as a new healthcare company focused on saving and revitalizing rural communities through the acquisition and management of rural hospitals across the United States.

But, Americore wasn’t a savior for the hospital. Following the acquisition by Americore Health and its leader Grant White, there was turmoil, halts in service, lawsuits, payroll issues, the unpaid electric bill and taxes owed to the borough, and ultimately a shutdown of all inpatient services by the state. The most terrible misfortune, however was personal—the furlough of 92 employees.

Americore Holdings LLC declared Chapter 11 bankruptcy on December 31, 2019. White stepped aside as CEO in February 2020 because he was under state and federal investigation.

The borough and the school district have been fighting ever since to recoup delinquent funds.