Creditors ask court to expedite discovery

July 22, 2010 at 12:00a.m.

By WILLIAM K. ALCORN

YOUNGSTOWN

Forum Health’s creditors have asked the U.S. Bankruptcy Court to take jurisdiction over evidence disputes in the case.

In a motion filed with the court, MBIA, an insurance company representing Forum’s major secured creditors, asked Judge Kay Woods to compel Ardent Health Services to produce discovery requests within three days.

Discovery is part of the litigation process during which each party requests relevant information and documents from the other side in an attempt to “discover” pertinent facts, according to Lectlaw.com.

MBIA also asked the court to order an expedited hearing on the discovery information and a shortening of the notice period for the hearing.

The sale hearing in bankruptcy court is scheduled for Aug. 10. An auction of Forum Health’s assets is scheduled for Aug. 5 in the Cleveland offices of Forum’s attorneys, McDonald Hopkins.

If there is not time for “meaningful discovery” before the sale hearing, MBIA said it “will be forced to request that the sale hearing be continued, which will delay these cases even further.”

At the center of the discovery feud between MBIA and Ardent, which has proposed to buy Forum for $69.8 million, are memorandums of understanding negotiated between Ardent and Forum’s seven unions.

MBIA said it needs those memorandums to determine if Ardent’s bid maximizes Forum’s assets and if the memorandums give Ardent an unfair advantage over other bidders.

Last week, Judge Woods gave MBIA limited access to the documents, minus the wages and benefits information.

According to MBIA, Ardent has not provided discovery to either original requests or narrowed requests approved by the court.

In the meantime, Ohio Attorney General Richard Cordray said his office expects to complete its review of Ardent Health Services’ proposal to buy bankrupt Forum Health by the end of the month. The role of the attorney general is to represent the public when transactions involve nonprofits, he said.

Forum’s major components are Northside Medical Center in Youngstown, Trumbull Memorial Hospital in Warren and Hillside Rehabilitation Hospital in Howland.