IRON MOUNTAIN — Dickinson County Healthcare System’s attorney will propose the beleaguered hospital pursue Chapter 11 bankruptcy when the hospital board meets Tuesday, offering the possibility the facility in Iron Mountain can remain open during a restructuring, county officials said today.

“None of us like where we’re at, but it’s where we’re at,” said Commissioner Joe Stevens, a liaison to the hospital board. “We have to go forward.”

A Chapter 11 filing allows an organization protection from creditors as it reorganizes, but the process is bound to be complicated — and likely contentious, as the court must adjust millions of dollars of debt among competing interests.

Stevens said he hopes the hospital can remain open through bankruptcy, but acknowledged there are other scenarios that may be discussed by hospital attorney Michael Celello at Tuesday’s meeting.

County Controller Brian Bousley said a bankruptcy plan would first have to be approved by the hospital board, and then the county board.

The two boards met at 7:15 a.m. today at the hospital. The Daily News was not informed of the meeting by either party.

The session was, however, attended by a number of citizens as a result of social media alerts from people who saw a notice posted over the weekend outside the courthouse. The county board will have its regular meeting at 6 p.m. today at the courthouse.

The move comes after hospital officials announced Tuesday a sale to Marquette-based UP Health System would no longer be pursued. The organizations said they had terminated a non-binding letter of intent signed in July, citing “an inability to reach agreement on the terms of an acquisition.”

DCHS began talks with UP Health after a proposed deal with Bellin Health of Green Bay, Wis., fell through in May. Bellin withdrew from an acquisition agreement that was estimated at $61 million, all of which would have gone to pay the hospital’s long-term debt and unfunded pension liabilities.

Jim Anderson can be reached at 906-774-3500 ext. 26 or janderson@ironmountaindailynews.com.

UPDATE: Dickinson County Healthcare System issued this written news release at 4 p.m. Central time today:

Dickinson County Healthcare System’s legal counsel recommends business reorganization through voluntary Chapter 11 bankruptcy

IRON MOUNTAIN — This morning at a special session of The Dickinson County Commissioners Meeting at Dickinson Memorial Hospital, the Dickinson County Healthcare System Hospital Board of Trustees and the County Commissioners met in a joint public meeting to discuss the future options for DCHS.

During the meeting, DCHS legal counsel Michael P. Celello announced that at tomorrow’s hospital Board of Trustees meeting, he will make a recommendation to the board for permission to begin the legal pursuit of a business reorganization through a voluntary Chapter 11 bankruptcy. Mr. Celello stated, “Attempts at being acquired have fallen short and it is my opinion that a business reorganization is in the best of the interest of the financial future of the hospital. Reorganization also offers the greatest chance for DCHS to maintain services and the staffing required to provide said services.”

Despite DCHS’s attempts to reduce expenses, which so far in 2018 have resulted in nearly $5 million savings compared to the same period in 2017, the financial struggles continue due to unprecedented decreases in patient utilization of services.

The hospital Board of Trustees will hear Mr. Celello’s recommendation at tomorrow’s board meeting and the board will deliberate the issue. Hospital Board President Bill Edberg explained, “It is unfortunate that it has come to this, but the hospital board will continue to make the difficult decisions necessary to preserve the provision of quality care in this community.”

The Dickinson County Healthcare System Hospital Board meeting is scheduled Tuesday, Sept. 25, at noon in conference room E, located on the lower level of Dickinson Memorial Hospital.