UMC releases details of ultimatum given to El Paso Children’s Hospital

University Medical Center has released details of the term sheet it offered to the El Paso Children’s hospital as the two try to resolve a multi-million dollar debt that’s threatened the sustainability of both hospitals.

A UMC spokesman said the term sheet approved Monday is not a first draft. ABC-7 took an in depth look at the six-page document.

According to the document, UMC proposes to reserve the power to approve the Children’s hospital budget, select and remove its CEO, change its name, incur debt or sell assets, as well as bankruptcy, dissolution or receivership.

Here’s a look at some of the highlights in the document in which UMC would acquire a controlling interest in Children’s in exchange for forgiving a portion of Children’s debt:

UMC wants the hospital to appoint a new board of directors.
UMC said Children’s owed it more than $89 million as of Dec. 31, 2014.
It proposes to make Children’s pay just short of $50 million, and take what it calls a membership interest in Children’s for the other $39.9 million.
Numbers would be updated and finalized should Children’s agree to the proposal.
For a five year period, UMC would not accept a bankruptcy filing from Children’s, unless required by law.
UMC also wants Children’s to designate a permanent, not interim, CEO.
UMC would retain the unilateral right to take any action related by Children’s if it’s required by law, if it’s necessary to maintain Children’s tax-exempt status or if UMC determines that Children’s board has failed to comply with its duties to protect the financial integrity of Children’s or to provide quality health care.
UMC would provide written notice to county commissioners should it ever propose to merge Children’s into UMC

ABC-7 has reached out to Children’s Hospital administrators for comment and will update you when we hear back.

Monday, the UMC board voted to give Children’s until Friday to accept or reject the term sheet. UMC also agreed to provide the 3-year hospital with a 30-day notice that it will cease to provide services to it unless it accepts the proposal.

To read the full term sheet, click here.