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County plans on making filing in Children’s Hospital bankruptcy case on Wednesday

ABC-7 is uncovering more information about what’s next in the El Paso Children’s Hospital bankruptcy, including the payments it is now making to University Medical Center.

UMC spokesman Ryan Mielke said the hospital has received received $1,000,872.87 from El Paso Children’s. These are the first payments received by the county hospital in more than a year.

As ABC-7 first reported last week, UMC is getting the payments under a schedule set by the bankruptcy court for all bills going forward. The money is covering rent and services provided by UMC to El Paso Childrens on a current basis, and not towards the $100 million dollar debt UMC says Children’s has accrued.

Bankruptcy documents obtained by ABC-7 show UMC should have been paid $1,032,000 by the beginning of July. The document lays out payments at regular intervals totaling $3,988,000 over 13 weeks:

“That’s good news that they’re finally paying their bills, which is part of bankruptcy,” County Judge Veronica Escobar said. “When they’re in bankruptcy court, there’s a clock, they have to start paying their bills, they have to present a plan. There’s all sorts of things that the bankruptcy process requires of them. And so the good news is that for UMC, the bleeding has stopped on a monthly basis.”

County commissioners Monday also discussed the first filings the county will make in the Children’s bankruptcy since mediation between the two failed last week.

The county is considering disputing some of El Paso Children’s costs previously approved by the bankruptcy judge in this case.

Escobar said the county now has to look out for taxpayer interests, arguing that the children’s hospital is paying too much to consultants that it should be using to pay back the debt to UMC.

Escobar said the county is considering filing opposition to fees from turnaround consultant AlixPartners currently listed as getting $180,000 a month. In addition, they may dispute an administrator for the group getting $695 an hour from Children’s.

On top of that, AlixPartners is listed as having 2 employees working on the bankruptcy filing at $1,035 an hour each, with a minimum of 5 hours per week.

“Those are unsettling amounts,” Escobar said. “Especially when we consider that some of that is local money, and we believe it’s important for the county to be the voice of the taxpayer through these proceedings.”

These expenses and all others from El Paso Children’s have previously been presented to and approved by the bankruptcy judge, and the county may file their opposition by Wednesday.

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