Judge OKs more time for Forum

Hearings on Forum’s motion to set aside union contracts at Northside are scheduled; 50 layoffs announced.

By WILLIAM K. ALCORN

VINDICATOR STAFF WRITER

YOUNGSTOWN — Forum Health came out of a bankruptcy court hearing Tuesday with the temporary relief it sought to keep the hospital system on a path to emerge from bankruptcy.

Two Northside Medical Center unions dropped their objections to Forum Health’s beginning the process of transferring the hospital system’s pension plan to the federal Pension Benefit Guaranty Corp., clearing the way for Forum to get out from under the pension obligations.

Then, U.S. Bankruptcy Court Judge Kay Woods extended Forum’s exclusivity period to Sept. 15, the date by which the hospital system must submit a reorganization plan agreeable to its lenders and the court. She also said Forum’s submission of a reorganization plan by the deadline would trigger an additional 60-day exclusivity period.

Exclusivity means that Forum is the only entity that can submit a reorganization plan. Should Forum lose its exclusive status, any interested parties, such as lenders and creditors, could submit plans to the court, which could include selling off the facilities.

“I hope a plan can be filed by Sept. 15. These debtors [Forum] are important to this community. If the plan is not submitted, I think there are real troubles in this case,” Judge Woods said.

Also Tuesday, Forum Health announced the layoff of 50 Northside employees over the next 30 days and the closing of its behavioral health department at Northside. Michael Seelman, Northside chief operating officer, said the behavioral unit will be moved to TMH in Warren.

Forum Health operates three major hospitals: Northside in Youngstown, Trumbull Memorial Hospital in Warren and Hillside Rehabilitation Hospital in Howland.

Getting out from under the financial obligation of the pension is a key ingredient to the hospital system’s emerging from protection under Chapter 11 of U.S. Bankruptcy laws and to its presenting a feasible reorganization plan Sept. 15, Forum officials say.

Walter Pishkur, Forum president and chief executive officer, said the pension fund is underfunded by more than $100 million, plus the company did not pay $1,437,000 into the plan that was due April 15. The PBGC, in a court filing, said the Forum pension plan is underfunded by $207.3 million.

Terminating the pension plan would be a violation of existing contracts with the Youngstown General Duty Nurses Association/Ohio Nurses Association, which represents nurses at Northside; and with Service Employees International Union District 1199, which represents service and technical workers at Northside.

Youngstown General Duty Nurses Association president Eric Williams said the union is pleased that Judge Woods ruled against Forum Health in its preliminary bid to reject the nurses’ labor contract pension-plan provisions.

Judge Woods denied Forum’s motion when it became evident the unions had no objection to Forum’s starting the process of shifting pension obligations.

The other key groups involved in the bankruptcy are the lenders, to whom Forum owes $139 million, and its creditors.

“Contrary to popular belief, the lenders don’t want the hospital to fail. What we want is a feasible reorganization plan,” Heather Lennox, an attorney representing the group, said in court Tuesday.

While the lender group is “cautiously optimistic” that a mutually agreeable reorganization plan can be worked out, “it is our cash that the debtor [Forum] is continuing to burn. If Forum can’t negotiate a consensual plan by the Sept. 15 deadline, I don’t think we can continue,” Lennox said.

The parties are traveling two simultaneous paths toward resolving the contract issue.

One, Judge Woods scheduled evidentiary hearings on Forum’s motion to set aside the YGDNA and SEIU contracts.

The hearing on the nurses’ contract will be at 9:30 a.m. July 23. Forum and the nurses union had reached a tentative agreement, which achieved the $4.4 million in savings Forum wanted from the employee group. The union ratified the agreement, but the Forum board of trustees rejected it, saying that the elimination of concessions in 2010 was too soon to give the hospital system a chance to become financially stable. Northside nurses have since authorized its leadership to call a strike, and as of Tuesday morning, no bargaining sessions had been scheduled between the two.

The evidentiary hearing for the service workers contract set-aside will be at 9:30 a.m. July 27. The hearing was set to be after scheduled negotiating sessions today and July 22.

Forum Health is seeking $5.6 million in concessions from the SEIU local and has already implemented $1.4 million in concessions from nonunion employees at Northside, Seelman said.

“Our intention from day one has been to work outside of a third party, the court,” Pishkur said.

Forum will submit a reorganization plan to the court by Sept. 15, and the target date for emerging from bankruptcy remains Dec. 16, he said.

alcorn@vindy.com

SEE ALSO: Northside personnel costs to drop $2.7M.