A US Bankruptcy judge ruled recently that El Paso County Judge Veronica Escobar and Commissioner David Stout will be able to observe the mediation session between the University Medical Center of El Paso and El Paso Children’s Hospital. The judges will not be full participants in the mediation, but if input is needed they are available and permitted to respond.

The Commissioners Court recently hired a bankruptcy attorney to be part of the mediation between the hospitals. The county filed a motion and an emergency hearing was held immediately to make a determination about the judges. Children’s Hospital had originally objected to the judge observers and called the request “beyond untimely.” They also argued that the participation could harm the outcome of the mediation. Their opinion is there are no purposes to having the judges there and that it undermines the confidentiality of the process, jeopardizing potential success.

In May, Children’s Hospital filed for bankruptcy protection following failed mediation attempts with the University Medical Center. Allegations are that Children’s owes more than $90 million, but disputes that amount. Additional lesser amounts are also owed to other creditors. Earlier negotiations failed when UMC refused to drop some of its liens against Children’s.

Judge Escobar has previously stated that by Children’s declaring bankruptcy and clearing the liens, the hospital board will try to sell the hospital. Previously, she campaigned for a $120 million taxpayer funded bond to build the hospital.

The upcoming mediation session will be confidential and no members of the public will be permitted to attend. The next bankruptcy hearing is scheduled for July 14.