Coffee Health Group, Ala., defaults on bonds, disclosure agreement

By Caroline Salls

Pittsburgh, Feb. 16 - The Health Care Authority of Lauderdale County and the City of Florence, Ala., which does business under the name Coffee Health Group, is in default on its series 1999A, series 2000A and series 2000B bonds, according to a Coffee Health Group notice.

The default stems from the authority's failure to maintain unrestricted cash and marketable securities equal to 90 days of operating expenses as of Dec. 31.

As of Dec. 31, Coffee Health Group had unrestricted cash and marketable securities equal to 83 days of operating expenses.

In addition, the authority said bond insurer MBIA claims that Coffee Health Group is in default for failing to reimburse MBIA's default-related attorney fees and expenses.

According to the notice, the authority has breached its continuing disclosure agreement because it did not file its audited financial statements within 180 days of the end of the fiscal year ended June 30, 2009.

Coffee Health Group said it will not receive the financial results from its auditors unless existing defaults are waived, which the authority does not expect to happen.

Coffee Health Group operates two acute care hospitals in Alabama.

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