St. Francis seeking to regain hospitals


POSTED: Tuesday, December 15, 2009

St. Francis Healthcare System of Hawaii filed a reorganization plan yesterday that calls for it to regain ownership of the two hospitals that it sold to Hawaii Medical Center for $67.9 million in January 2007.

The former owner of the Liliha and Ewa Beach hospitals would then seek a hospital management company to operate the facilities, according to attorney Joshua Mester, who told U.S. Bankruptcy Judge Robert Faris that element of the plan would be detailed in a disclosure statement that St. Francis will file in the next couple of days.

A disclosure statement offers financial details of a reorganization plan.

Faris, who was scheduled to hear arguments yesterday on competing disclosure statements from HMC and the unsecured creditors' committee, scheduled a hearing for Jan. 27 to hear arguments on all three disclosure statements. He said that if creditors are going to have three competing plans to review, they all should be sent out at the same time. The hearing will determine whether the three plans are feasible.

Hawaii Medical Center, which owes St. Francis $46.3 million in loans, filed for bankruptcy in August 2008 after suffering operating losses of about $21.8 million since its purchase.

HMC East (Liliha) has 240 licensed beds (188 acute and 52 skilled-nursing facility beds), while HMC West (Ewa Beach) has 102 acute licensed beds for a combined total of 342 beds for the two hospitals.

CHA Hawaii, whose parent is Cardiovascular Hospitals of America LLC, owns 54 percent of Hawaii Medical Center, while Hawaii Physician Group LLC, consisting of 130 Hawaii-based physicians, owns 45 percent and St. Francis Healthcare System owns 1 percent.