A Turnaround Story: Southwest Health System
When Southwest Health System (SHS), in Cortez, Colorado, contacted Community Hospital Corporation (CHC) early in 2018, the hospital had violated various bond covenants associated with its $30 million expansion and renovation project. In fact, the organization had failed to meet the 80 days-cash-on-hand requirements for four consecutive quarters. This violation triggered technical default, which could have led to hospital bankruptcy and closure.
Lenders concerned with the financial situation communicated with the board directly and required an outside consulting firm to evaluate the situation and develop...