Mercy Iowa City closes sale of hospital to University of Iowa

By Sarah Lizee

Olympia, Wash., Feb. 1 – Mercy Iowa City closed the sale of its hospital and clinic assets to the University of Iowa on Wednesday, according to a notice filed Thursday with the U.S. Bankruptcy Court for the Northern District of Iowa.

As a reminder, following a prolonged auction process, the university’s final bid consisted of $28 million, plus an amount equal to the debtors’ actual operating losses exclusive of professional fees and all other costs and expenses relating to the bankruptcy that are not already otherwise covered by the debtors’ cash and other investments for the period starting Dec. 1 and continuing until the transaction closed, as well as a commitment to invest at least $25 million within five years of the transaction closing on information technology and physical plant infrastructure at the hospital.

The Iowa City-based hospital filed Chapter 11 bankruptcy on Aug. 7 under case number 23-00623.

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