Updated March 26 at 7:54am

Judge OKs stalking horse bid for Westerly Hospital


SOUTH KINGSTOWN – Following a two-hour hearing on June 13, Superior Court Judge Brian Stern gave his approval to a $69 million “stalking horse” bid from Lawrence & Memorial in New London, Conn. to purchase Westerly Hospital, now in receivership.

“We now have a clear vision of where the goal line is [for the future of Westerly Hospital],” Stern said, announcing his decision. “At the end of the day, there will be a Westerly Hospital.”

After a lengthy presentation by court-appointed special master Mark Russo, laying out the terms and conditions of the stalking horse bid, lawyers representing numerous entities – including Washington Trust Bank, Blue Cross & Blue Shield of Rhode Island, the R.I. Attorney General’s office and the R.I. Executive Office of Health and Human Services – offered no objections to the bid, but asked that their rights be reserved to challenge any agreement moving forward.

Stern reserved his right to make a final decision based not on what the highest bid but what “is in the best interests of the state.”

Other potential bidders for Westerly Hospital will have until July 30 to submit a bid, with a sale hearing scheduled for Aug. 13, according to Christopher Callacci, counsel for United Nurses and Allied Professionals, the union representing workers at Westerly Hospital.

Legislation that recently passed the R.I General Assembly amending the Hospital Conversions Act contains one change that could influence the proposed sale of Westerly Hospital, Russo said, in answer to a question from Stern.

The sale may be eligible for an expedited review by regulators granted to nonprofit hospitals in distress, because “Rhode Island” had been dropped from the bill’s language, allowing a nonprofit from Connecticut or other states to be eligible for such an expedited review.

The bill is currently before Gov. Lincoln D. Chafee, whose spokeswoman Christine Hunsinger said on June 13 that the governor was considering vetoing the legislation.


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