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Forum ordered to give creditors evidence
By WILLIAM K. ALCORN
YOUNGSTOWN
Forum Health was ordered by the U.S. Bankruptcy Court to give MBIA Insurance edited copies of the memorandums of understanding, “to the extent Forum has them,” negotiated between the health system’s unions and Ardent Health Services, a potential buyer.
Judge Kay Woods got fully involved Thursday in the dispute between MBIA, which represents the bankrupt Forum’s major secured creditors, and the hospital system when the parties again failed to resolve the issues themselves.
When Thursday’s hearing began at 9:30 a.m., Judge Woods told the parties that if they could not agree on the scope of discovery, the “court will rule today. We’re not leaving here without a clear understanding of what is due in discovery.”
To that end, she recessed the hearing to give the parties a last chance to come to agreement on their own. “It’s your choice. We can go through them one-by-one on the record or you can work things out.”
However, when the hearing was reconvened at about 3 p.m., a list of issues remained on which Judge Woods would rule.
One of the top contentious issues is the memorandums of agreement between Ardent and Forum’s employee unions, in which the unions agreed to concessions.
Forum and Ardent argued that the memorandums, the approval of which was followed by an offer by Ardent to buy Forum for $69.8 million, contain privileged information and refused to make them available to MBIA.
Ardent also pledged to spend $50 million to $75 million to update Forum’s facilities and equipment, and keep its three hospitals open.
MBIA attorney Geoffrey J. Ritts said the full memos are necessary for MBIA to determine if Ardent’s offer maximizes Forum’s assets, whether they give Ardent an unfair advantage over other bidders, and to decide whether to bject to the sale.
Ritts, who said he thinks Forum has all of the documents, said there is a lack of reliable information from Forum Health.
“There are shifting stories and shifting numbers, and we don’t know what to believe,” he said.
Judge Woods broke the deadlock and told Forum if it has the memos it must produce them, but allowed Forum to redact — or edit out — information about wages and benefits. For its part, MBIA is not permitted to share the information with anyone else.
The judge also forced a compromise on MBIA’s request for all of Forum’s e-mails as they relate to the sale. Judge Woods ordered Forum to produce the e-mails, but narrowed the scope to the time the sale process began in December 2009 and to limit them to those involving “key parties” to the process.
Forum Health filed for Chapter 11 protection under the U.S. Bankruptcy Code in March 2009. Forum’s major facilities are Northside Medical Center in Youngstown, Trumbull Memorial Hospital in Warren and Hillside Rehabilitation Hospital in Howland.