Can You Say: Sub-Prime?....11/24

$55 million term loan and $20 million revolving line of credit from GMAC-RFC
$80 million from Vestar Capital Partners of New York City
$50 million Thoma Cressey, plus another $10 million

So, with over $200 million invested, what do they get?
Two hospitals that are paddling in red ink.
One that has gone up and is headed down.
Two that are reasonably profitable. (However, nothing close to what was forcasted....) They're the ones absorbing the losses of the other two.

This, my friends, is called venture capital. They would have done better investing in liquor stores and pawn shops. With the bottom falling out of sub-prime real estate loans, one wonders if this is in the same catagory. Banks and lending institutions all over the country are feeling the pain--just look at the stock market.

But, don't worry, GE only lost $17 million of the $25 million they had in Arcon. (Source: Final Decision, Sharon Hospital.)

I really want to see how Michael Browder's vision for the company is going to pull this one out of the fire....