The bankruptcy case involving the former St. Francis Hospitals in Liliha and 'Ewa has been moved to Hawai'i from Delaware.

Delaware Bankruptcy Judge Peter Walsh on Friday transferred the Hawaii Medical Center LLC bankruptcy to federal bankruptcy court in Hawai'i at the request of St. Francis Health Care System, which sold the hospitals to Hawaii Medical Center last year.

Hawaii Medical filed for Chapter 11 reorganization last month after its main creditor, Siemens Finance, decided not to extend a loan agreement.

The bankruptcy filing was made in Delaware because Hawaii Medical was incorporated in that state.

In a two-page order, Walsh said the transfer "was in the best interest" of the company.

Hawaii Medical Center LLC listed assets of between $10 million and $50 million, but owes between $50 million and $100 million to more than 1,000 creditors.

Many of those creditors are vendors and small businesses based in Hawai'i that would have a difficult time following bankruptcy proceedings conducted in Delaware.

Hawaii Medical Center is jointly owned by Kansas-based Cardiovascular Hospitals of America LLC and a group of local doctors that owns 49 percent of the company.

The company purchased the financially strapped medical centers in January 2007 from St. Francis, which helped finance the deal.

Since the purchase, the company has continued to struggle, due in large part to reduced government reimbursements for Medicare and Medicaid.

In June, HMC laid off 89 employees in its business and information management departments and outsourced the positions to a Tennessee-based firm.

Last month, HMC said that it would lay off about 80 more employees.