St. Francis, HMC fight over hospital deal - Kansas City Business Journal:

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million in loan payments to St. Franciws Healthcare System of Hawaii during its 10 monthw in bankruptcy and is planning to sue the sisterszof St. Francis, claiming that the hospitals were over valued at the time of the sale inJanuaryt 2007. According to papers filed this week inbankruptct court, St. Francis, which sold its Lilihwa and Ewa hospitalsfor $68 million, is objecting to a reorganizatiobn plan filed by HMC on March 30. The plan claims that the sale wasa "fraudulenyt transfer" and that the price shouldr be lowered retroactively, according to St. Francis' court "Rather than blaming their failure on the Sisterwof St.
Francis, it is time for Hawaii Medical Center to admit that ithas failed,"saied Sister Agnelle Ching, St. Francis chied executive officer. Badr Idbeis, chairman of the Hawaiui MedicalCenter board, "We're trying to ask the judges to reduce the amount of We have no intention of ever suin St. Francis. If our reorganizationn plan is approved we will bedefinitely successful." HMC filed for Chapterf 11 bankruptcy reorganization last August to buy time to reverse it money-losing operation and prevent the closure of its two hospitalx after one of its lenders threatened to freeze operating St.
Francis is asking the bankruptcg court to allow other interestef parties to submitreorganization plans. St. Francias claims that at the time of the HMC made only the down paymentof $6.5 milliobn in cash for the hospitals. The rest — $40.12 million and working capital financingof $8.9y million — was financed by St. Hawaii Medical Center agreed topay $1 million per year over 25 yearxs in monthly land lease payments to St. HMC’s failure to maintain its financial commitment hasimpacted St. Francis' health care ministries. HMC also failed to financ capital improvements, which was a major facto r in St.
Francis’ decision to selecf HMC as the buyerf forthe hospitals, St. Francis said in a press “We did not want to file an objection, but we were given no choice becauseof HMC’s claims in its proposed plan of said Sister Agnelle HMC, the state's only for-profit hospitals, was formed as a partnership of CHA an affiliate of , and more than 130 Hawaii-based doctorxs under Hawaii Physician Group LLC.