New Horizons Medical Center, formerly Owen County Hospital, has filed for bankruptcy protection.
The nonprofit hospital and New Horizons Family Practice filed for reorganization under Chapter 11 on Friday.
This is not the first time the hospital has experienced financial difficulties.
The facility was on the verge of closing when Bernard Poe, a pharmacist, and his family formed a nonprofit corporation and bought the hospital in 2001 with a $5.4 million loan from the U.S. Department of Agriculture, according to Herald-Leader archives.
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The hospital's former owners sought bankruptcy protection after that sale.
Poe, chief executive officer of the facility, said in an affidavit filed in U.S. Bankruptcy Court for the Eastern District of Kentucky that the hospital still owed $4.33 million to the USDA.
The hospital has "received interest" from a potential buyer or buyers and intends to keep operating until a sale can be completed, documents show.
"Market conditions indicate that the best way to sell its assets free and clear and to obtain the greatest recovery for the benefit of all creditors would be to utilize the Chapter 11 protections and 363 sale process," Poe said in the affidavit.
The facility listed its largest unsecured creditor as the Marshall Estate, which is owed a litigation debt of $5 million.
Its second-largest debt is $900,000, owed to Acute Care of Ankeny, Iowa, which is also a litigation debt. New Horizons listed both claims as disputed.
The hospital has served Owen, Gallatin and Carroll counties since 1951.