The Bank of Hays has filed a petition to foreclose on the Hillsboro Community Hospital.
In 2015, the bank issued a $9.7 million construction loan for the hospital. According to the lawsuit, the bank is requesting the full amount of the loan plus interest and late fees be paid on the debt. If the principal is not paid within 14 days of a judge’s ruling on the matter, the bank asks in the lawsuit that the property be sold to settle the debt.
According to the lawsuit, the bank held both the mortgage to the hospital property and all of the assets in the building.
The lawsuit also lists the City of Hillsboro, Kan.; Public Building Commission of Hillsboro, Kan.; APP Group International, LLC; and the Board of County Commissioners for Marion County as defendants in the lawsuit.
The City of Hillsboro has been listed as a defendant due to the lease agreement with the Public Building Commission of Hillsboro, Kan. The lawsuit cites that the city may claim some interest in the property, depending on the outcome of the case.
The Board of County Commissioners for Marion County has been joined to the lawsuit because of $300,000 in unpaid real property taxes on the property.
City of Hillsboro Administrator Larry Paine said he was unable to comment at this time. He directed the Free Press to Attorney Tyler Heffron of Tripplett, Woolf and Garretson in Wichita. Heffron was retained on the case yesterday. Heffron said he was unable to comment as well.
We’ll keep you updated when someone is able to comment or when more information becomes available.