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DeQUEEN, Ark.—A Circuit Judge in Sevier County extended a receivership Friday for the county's much needed hospital.

The order inked Friday by Circuit Judge Tom Cooper stems from legal action filed on behalf of Sevier County, Lisa Moser, Ashley Knittig and Chad Klitz by Little Rock lawyer Bruce Tidwell. Moser and Klitz are current employees of DeQueen Medical Center Inc. and Knittig is a former employee of DMCI.

On the last days of March, Cooper granted an emergency request from the plaintiffs to put the hospital in receivership and prohibit the owners, Jorge and Ricardo Perez, from taking action that would further drain the hospital's remaining assets and leave the rural community without a nearby emergency room.

The temporary orders were extended Friday by Cooper at the end of a hearing at the Sevier County courthouse. No representative for Jorge Perez and Ricardo Perez was present.

"Attempts are ongoing to obtain service on defendants Jorge Perez and Ricardo Perez at their last known address in Miami, Florida," the order Cooper signed Friday states. "DMCI is insolvent and unable to pay its debts as they become due. Employees of DMCI have either been laid off or have quit their employment because they have not been paid. Further, healthcare professionals essential to the operation of DMCI and to continued licensure of the hospital have discontinued providing medical services."

Prior to the court action, the hospital was put on notice that it was in violation of the Emergency Medical Treatment and Active Labor Act, various regulations by the Centers for Medicare and Medicaid Services and the Arkansas Department of Health had identified steps the hospital needed to take to retain licensure in the state and certification to provide service to Medicare beneficiaries.

"Prior management had submitted a corrective action plan to Arkansas Dept. of Health that was found to be non-compliant and which threatened the licensure and certification status of DMCI," the order states.

Since the appointment of Rachel Matheson R.N. as receiver March 28, the hospital has been working with a consultant and state agencies to address the hospital's problems. The need for a receiver is "illustrated" in Cooper's order by examples of mismanagement by the owners.

"Defendant Ricardo Perez withdrew $3,850 from the bank account of DMCI the day after the initial hearing conducted on March 28 and defendant Jorge Perez attempted to place DMCI in bankruptcy in the Southern District of Florida," the order states.

The bankruptcy filing was dismissed April 12 because of objections by the plaintiffs in the Sevier County case.

"There is a real and present danger that the assets of DMCI are being dissipated and not used for providing DMCI's essential medical services, including payment of employees and healthcare professionals," the order states. "The continued dissipation of assets will jeopardize not only the ability of DMCI to continue to operate as a licensed medical provider, but will also endanger the health and welfare of the citizens of Sevier County who are dependent upon its services."

The order forbids the defendants from taking any action on behalf of DMCI or transferring or expending the hospital's remaining assets.

The court will continue to monitor Matheson's progress as receiver while she endeavors to bring the hospital into compliance with state standards and improve its financial situation.

The First National Bank of DeQueen, which holds notes on multiple outstanding loans to the hospital totaling several hundred thousand dollars, has filed a motion to intervene in the matter and receive notice of hearings in the case. No additional hearings are currently scheduled.

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