Forum’s creditors seek union data

By WILLIAM K. ALCORN

alcorn@vindy.com

YOUNGSTOWN

Forum Health’s major secured creditors are seeking information about agreements with the bankrupt health-care system’s unions and its stand-alone reorganization plan.

The information is necessary for the creditors to assess any plan or sale motion filed by the debtors, according to a motion filed this week in U.S. Bankruptcy Court Northern District of Ohio Eastern Division.

The motion, for which no hearing date has been set, also says the information is needed to evaluate Forum’s efforts to maximize the value of its assets for the benefit of the creditors.

The motion, filed by MBIA Insurance Corp., as bond insurer, and U.S. Bank National Association, as master trustee, said that Forum and the unions have denied access to the memorandums of understanding, saying they are subject to a confidentiality agreement with the potential buyer of the hospital system.

The major creditors also filed a reorganization plan of their own, which calls for modifying collective- bargaining agreements so total labor costs do not exceed an average of 49 percent of net patient revenues, establishing work rules that conform to market standards and using Forum Health Foundation funds to reduce debt.

The creditors’ plan came on the heels of new concessionary labor agreements reached between Ardent Health Services, a potential buyer of Forum, and the American Federation of State, County and Municipal Employees local unions and Service Employees International Union District 1199.

Deborah Bindas, AFSCME staff representative, at the time said she feared that if the creditors’ reorganization plan is approved by the court, union contracts will be voided and the creditors will set the work standards.

Forum filed for Chapter 11 in March 2009 after having lost nearly $100 million in the preceding four years. Since filing for Chapter 11, the combined system has reported an additional $20.6 million in losses through March this year, most from Northside Medical Center, MBIA said.

Other major components of Forum Health are Trumbull Memorial Hospital in Warren and Hillside Rehabilitation Hospital in Howland.