A judge issued a temporary restraining order to halt demolition of the former Pungo District Hospital in Belhaven on Monday after several members of the nonprofit that owns the building claimed that managers of the group had misled them into voting it be torn down.
The order, issued by a judge in Martin County Superior Court, is good for 10 days.
Geeta Kapur, a Durham attorney who filed the complaint on behalf of seven members of Pantego Creek LLC, said a hearing has been scheduled next Thursday, Dec. 8, at which both sides will be able to present their case.
Kapur said her clients want a judge to force the managers of Pantego Creek LLC to reopen discussions about the disposition of the building so that a new vote can be held on whether to demolish the building or sell it to another community-based nonprofit that wants to reopen it with an emergency room.
The present dispute began in 2013 when Vidant Health announced it would be closing the hospital. Vidant took over the hospital in 2011, promising to improve services and make it financially viable.
Vidant has said the hospital could not be made viable. The hospital is in a rural area where many patients are unable to pay, and Medicaid and Medicare payments were not enough to cover the cost of operations.
Pantego Creek LLC was set up to protect the community’s interest in the hospital it had built and operated for decades once it went under Vidant’s management. The group has a voting membership of more than 100 people, and four managers.
Kapur said in the suit filed Monday that her clients, who say they are all members of the LLC, believe the group’s managers gave false information and withheld critical information in an effort to sway a majority of members to vote to destroy the hospital. The group also says the managers amended the LLC’s articles of organization to remove them as members without a vote of the membership, which they said was not allowed.
Recently, a group led by the town’s mayor, Adam O’Neal, has offered the LLC $500,000 to buy the hospital but the offer was rejected. The group has set up a nonprofit that would use private investments and a nearly $6 million U.S. Department of Agriculture loan to open an emergency room in the hospital, and might rent part of the building to operators of ancillary medical services. Instead, the LLC has obtained a permit to destroy the building, a job that will be paid for using up to $800,000 provided by Vidant Health.
The nearly 57,000-square-foot hospital building is valued on Beaufort County tax records at more than $2.5 million. It was built using federal funds and was expanded and maintained for decades using local funds, grants and money raised by supporters. Its 3.29-acre site, on East Water Street in downtown Belhaven, is valued at $590,000. As a community nonprofit, Pantego Creek LLC cannot hold onto the building or the land indefinitely, but must put the assets to use to benefit the community.
“My clients believe that from the time Vidant took over the hospital, the plan was to shut it down,” Kapur said. She said her clients were not allowed to vote on whether to accept the new nonprofit’s offer to buy the building; were told that they would be held personally financially responsible for the hospital if it were reopened, which is incorrect; and were not told that the new nonprofit had money lined up to restart the hospital. Had they known these things, Kapur said, they would not have voted to demolish the building.
“They want a hospital in their town,” Kapur said.