Mercy-Iowa City's Bankruptcy Paves Way for U of I Hospital Takeover

Mercy Hospital of Iowa City has filed for bankruptcy and announced plans for its acquisition by the University of Iowa in order to preserve continuity of care for patients and provide ongoing opportunities for physicians and employees. The proposed purchase, which is subject to approval by the Iowa Board of Regents and the bankruptcy court, aims to secure the hospital's assets and establish an advisory board and chief administrative officer for the hospital. The bankruptcy filing comes after Mercy's largest creditor, Preston Hollow Community Capital, claimed the hospital was in a "financial freefall" and sought the appointment of a receiver. Mercy disputes these claims and argues that Preston Hollow's actions put the hospital and its community at risk.