As lawyers could be seen leaving bankruptcy court in Youngstown Wednesday, there was little evidence of trouble. But recent filings between Forum Health and its creditors suggest tempers may be getting short.
Lawyers with Forum claim the health system's cases "have reached a critical juncture" and that Forum is poised to take final steps toward either a sale or the filing of a reorganization plan. But lawyers complain the system's "efforts have not been met with any degree of cooperation" from the so-called "consent parties" unless creditors can approve the deal in advance.
For their part, lawyers for the creditors argue that since 2006, Forum administrators have, in their words, "squandered" over $100 million losing another $23 million last year alone. Yet creditors claim Forum makes no apologies, shows no remorse. They said that now, after already having obtained ten previous extensions on its "cash collateral," intends to renege on its agreements, specifically with the arrangement of a sale of assets that creditors don't like.
The creditors claim they have been patient with Forum administrators in the past because they're running hospitals, suggesting any other business would have been forced into default a long time ago.
Forum lawyers admit they could file a motion later this week to sell most of the system's assets. While no names are mentioned, insiders believe it's to the Tennessee-based Ardent Health Services. However, the lawyers also complain creditors are trying to scuttle the deal because it may not pay back all of their debts.
That's something creditors said "cannot and should not be countenanced" and that they "have lost all confidence" in Forum to succeed.
Both sides are due back in court again in two weeks.
