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Blount Memorial sends cease and desist letter to UTMC over talks with Blount Co. to run hospital

Blount County Mayor Ed Mitchell announced earlier in February he was exploring the idea of having UT Medical Center take over management of Blount Memorial.

MARYVILLE, Tenn. — Attorneys for Blount Memorial Hospital sent a cease and desist letter to the University of Tennessee Medical Center amid an ongoing legal battle between Blount Memorial and Blount County leadership over who owns the property.

Blount County Mayor Ed Mitchell announced earlier in February he was exploring the idea of having UTMC take over management of Blount Memorial after bringing up "grave" concerns he had with the hospital's operation.

UTMC said on Feb. 15 it was talking with the mayor about "potential opportunities to assist Blount Memorial Hospital with its challenges."

In a letter addressed to UT Medical Center CEO Joseph Landsman on Feb. 21, attorneys representing Blount Memorial Hospital, Inc. asked UTMC to immediately cut off any negotiations and discussions with Blount County leadership.

"Given UTMC's known eagerness to enter into Blount County's market for health care services, please be advised that such an agreement with the County will clearly constitute intentional interference with a business relationship and subject UTMC to the payment of monetary damages to Blount Memorial," the letter said.

The Chancery Court judge ordered them both into mediation on March 14. 

Blount Memorial and Blount County leaders have been at odds over who controls the hospital's future after the non-profit that runs it tried to sell some property in Alcoa last year.

In 1946, the Blount County Commission created Blount Memorial Hospital, Inc., a non-profit to run Blount Memorial Hospital. In 1996, BMH, Inc. bought some property in Alcoa to set up its Springbrook Clinic. In 2022, the non-profit tried to sell the property for $22 million, the lawsuit said. 

The mayor argued Blount County owns all of Blount Memorial's assets and said he believed the non-profit corporation could not sell the property.

In a lawsuit filed in Blount County Chancery Court, lawyers for BMH, Inc. argued the non-profit corporation bought the property with revenues from the hospital and so they own it, not the county. Blount County possesses "no authority over BMH's operation and management, other than the power to appoint directors," the lawsuit said.

In a response, filed in Chancery Court on Feb. 7, lawyers for Blount County said "assets are owned for and on behalf of Blount County, Tennessee." Those lawyers argued Blount County bought the hospital and its property and cited Blount Memorial Hospital's use of bond debt issued by Blount County to fund its operations.

The legal battle over ownership is ongoing. In the cease and desist letter, lawyers warned UTMC the hospital remains under BMH, Inc.'s control. 

"Be assured, we are prepared to pursue whatever avenues are necessary on behalf of our client to immediately stop and rectify your conduct," the letter read.

On March 1, Blount County Mayor Ed Mitchell released a statement, saying "We will continue to do what we feel is right to save our hospital despite the current leadership's attempt to lead the hospital into failure."

10News has reached out UT Medical Center for a response to the letter.

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