(Published: Thursday, March 12, 2009) 11:23 a.m. Update - Kessler Memorial Hospital closed Thursday morning as an acute care hospital - just days after it appeared to have a buyer.
The hospital's board of directors terminated the agreement signed Friday for cardiovascular surgeon B. Reddy Dandolu to buy the hospital, Interim Chief Restructuring Officer Michael Sandnes said in a statement released by the hospital.
"The buyer could not obtain and transmit the necessary funds, as agreed upon, in order to continue operation of the hospital," Sandnes said.
Dandolu agreed to pay a non-refundable $300,000 down payment by the close of business Monday when he signed a letter of intent to purchase the hospital for a reported $7.5 million. That money was to be used to help cover a $500,000 payroll shortfall that prevented the hospitals employees from getting paid last week.
A $200,000 loan from the township to cover the balance was contingent upon the hospital receiving Dandolus down payment first. Employees are expected to receive partial paychecks today, Sandnes said.
"Every effort will be made to ensure that all outstanding pay due will be issued at the earliest opportunity, as this remains the board's highest priority," the statement said.
Meanwhile, the hospital has reached a tentative agreement with AtlantiCare Regional Medical Center to establish satellite emergency services at Kessler, according to Board President Ronald Sahli.
Sahli said in the release that the board had no choice but to cease acute care operations, having exhausted every avenue to keep the hospital.
"We recognize the dedication of our employees in staying with us during this difficult period, but the hospital has reached a point where we cannot legally or in good faith continue to find a partner to keep the hospital's operations intact," Sahli said. "We look forward to seeking alternative uses for our facility to continue to provide essential health services to the residents of Hammonton."
Check back for updates. See Friday's edition of The Press for complete coverage.
William B. Kessler Memorial Hospital in Hammonton closed its acute-care operations effective today.
About 25 patients who had been under Kesslers care were transferred to other facilities.
The emergency room remains open for walk-in patients, and hospital officials noted they have reached a tentative agreement with AtlantiCare Regional Medical Center to establish satellite emergency services at Kesslers facility.
More details are expected to emerge at a news conference scheduled for Friday afternoon.
The hospitals board of directors announced the closure of acute-care operations this morning.
They noted a group of investors who emerged last week as a prospective buyer for Kessler failed to make a down payment required to help the cash-strapped medical facility continue operating.
The board regretfully had no choice but to make this decision, having exhausted every avenue to maintain the hospital for our community, board president Ron Sahli said. We recognize the dedication of our employees in staying with us during this difficult period, but the hospital has reached a point where we cannot legally or in good faith continue to find a partner to keep the hospitals operations intact.
Kesslers board reached a sale agreement last week with DBR Healthcare, a Philadelphia-based coalition of investors. Kessler and town officials viewed the agreement as a last-ditch effort to keep the 45-year-old, 106-bed hospital open.
One of the investors B. Reddy Dandolu, a cardiovascular surgeon signed a letter of intent to buy Kessler for $7.5 million.
The agreement required Dandolu to make a $300,000 down payment by March 9 to help the hospital meet a $500,000 payroll shortfall.
Town Council approved a $200,000 emergency loan to Kessler to make up the difference on the condition that Dandolu made his down payment.
When Dandolu failed to make the down payment, Kesslers board of directors terminated the sale agreement.
Word of the termination came a day after state Department of Health and Senior Services Commissioner Heather Howard called Dandolus nonpayment a material breach of the letter of intent to purchase the hospital and suggested Kessler officials develop a new plan for the facilitys future.
We thank the commissioner for allowing us the time to make these final efforts to continue as an acute care hospital, Sahli said. We look forward to seeking alternative uses for our facility to continue to provide essential health services to the residents of Hammonton.
Meanwhile, Kessler employees have worked without a paycheck since March 6. Michael Sandnes, Kesslers chief restructuring officer, indicated employees will receive a partial paycheck today.
Every effort will be made to ensure that all outstanding pay due will be issued at the earliest opportunity, as this remains the boards highest priority, Kessler officials said in their press release.
These developments cap a tumultuous week for Kessler. Negotiations with one prospective buyer, Bayonne Medical Center, broke off late last week.
Then, even as DBR Healthcare emerged as a potential suitor, tthe state requested rescue squads to stop transporting patients to Kessler until the facility's financial problems were resolved.
On Tuesday, the hospital voluntary stopped admitting new patients because of the hospital's inability to meet its March 6 payroll obligations and the risk the facility would not be able to maintain sufficient staffing.
Kessler emerged from bankruptcy in November 2007. It was expected to lose about $4 million in 2008.
What a shame. This goes to show you what poor leadership does to a small local hospital. I can only think of Mrs. Bertino who was a very good leader who kept Kessler running very well.
Plenty of blame to go around here but poor hospital leadership over the last 10 to 15 years sealed the fate of Kessler. I also am very disappointed in our state government that mandates care for everyone but does not follow thru with any funding. I am very upset with Jon Corzine for putting all of the state aid this year ($44,000,000) into profitable North Jersey hospitals.
Jon Corzine was very aware of the problems Kessler Hospital was having and chose not to help Kessler. If the state can come up with $44,000,000 dollars for his local hospitals why couldn't we get some state aid to keep our acute care facility.
You can't lay all the blame at Corzine's door. If you remember, all the State asked from Kessler was a fiscal plan for the future, laying out a proposed solution to the problems and a direction for the future of the hospital. The hospital refused to provide that information. Again, who knows why the Board of the hospital made the decisions it did, but it seems just another reason why we are where we are today. If you were the one providing the funds for the hospital, would you be willing to throw away taxpayers money on an entity that couldn't even tell you how they would use the money and what the plans for the future are?
exactly Jim, everything has always been a big f'ing secret around here. Well not anymore. This is a disgrace and those involved in not providing the necessary information when it was needed or exploring options that would take control away from them are probably the only ones not being affected by job loss, etc. How do they all sleep?
Nobody will defend the past leadership at our local hospital but please do not tell me that our governor could not help our local hospital. If $44,000,000 million dollars of state financial aid can be provided for his profitable North Jersey hospitals, money could have been found to help our local hospital.
South Jersey taxpayers are constantly taking a beating from this governor, he knew our hospital needed help and he chose not to deliver the much needed aid. Please do not carry the water for Jon Corzine, he supports North Jersey and the big cities at the expense of South Jersey and the middle class taxpayers.
Why wouldn't the hospital provide the information he asked for? If he threw money at a North Jersey business with no plan for using the money productively, you would be the first one ridiculing him about that! This State certainly doesn't have any money to throw around. Maybe our local leaders and the public should have been screaming to Kessler to not only provide the info to the State, but to us too. Maybe we should ask LoBiondo about his earmarks in the stimulus package. He could have given some of the $7 million for to Kessler instead of a study on the decline of summer flounder, or a study on berries.
Corzine had money for hospitals in financial trouble. The hospital applied and filed out their paperwork. Corzine gave them $0. He gave all the money to North Jersey. By the time he got south of Trenton, there was no money left.
The hospital did fill out the paperwork but we did not get any funding from NJ. Corzine cannot say he did not receive the Kessler paperwork because he did and he chose not to support Kessler.
Corzine is bragging about how his current budget tax increases for 2009 are needed because he will not let hospitals go bankrupt in New Jersey. Maybe someone can inform Jon Corzine that Kessler Hospital is located in New Jersey. Let's face it, Jon Corzine does not care about supporting South Jersey because he caters to the North Jersey people and figures he can win re-election without South Jersey support. I will not forget to vote against Jon Corzine in November.
Oh, you figured out the master plan. The newspapers are in on it because they reported the lack of filing of the reports. Even the hospital is in on it because they admitted not supplying the information. Everyone is against South Jersey. We know that cause we are right and they are wrong. And do you forget that several hospitals in the Promised land of North Jersey have gone out of business too. Just admit the fact that many years of mismanagement at the hospital brought on this outcome. Now we need to continue moving forward to insure the safety of our community. We have a temporary solution in place and a more permanent solution is being worked on. Let's all work together to make it happen.
How many Govs. do we have to blame? Whitman, Florio, McGreevey, Corzine? While the govs. have changed over the years, the Kessler Foundation has stayed within the same family members. THAT never changed.Gimme a break.
well at least atlantic care came in and we have a er. Just think jim thanks to your old buddy board we almost lost a school. Keep up the good work. see you in November.
AtlantiCare statement regarding Kessler Memorial Hospital Kessler Memorial Hospitals Board contacted AtlantiCare late Wednesday night about working with them to ensure that patients who live in our region have access to emergency and other health care services. AtlantiCare will establish a satellite emergency department as soon as possible at the Kessler campus. We will collaborate with the New Jersey Department of Health and Senior Services, Kesslers Board, the Hammonton Rescue Squad and the Hammonton community to plan for the immediate and ongoing health care needs of the community. The well-being of patients living in our region is our paramount concern. Lori Herndon, RN Senior vice president and chief operating officer AtlantiCare Regional Medical Center
Is there any chance Atlanticare will be able to take over the entire hospital and give us a top notch facility. We've never had that under the Kessler title and it would be a welcome addition to our town.
Great Kessler's Board is still mentioned. They are like a cancer that needs to be cut out. Just will not let go of that lake front real estate. If the family donated that land years ago, why is it still theirs? Or is it an legal issue that if the hospital ever closed the land would revert back to them? Please someone make sense!!!!
let's all hide our red neck nature and hope acmc stays in hammonton. Good luck to the employees of Kessler. Thank you to the people who generously donated and supported Kessler. I look at it this way, ALMOST 50 GREAT YEARS.
Why is there a Kessler Board if there is no Kessler Hospital? Shouldn't they have gone away with the closure? How can they still be involved with moving forward with Atlanticare running the place. Aren't they responsible for ruining it.
