Hawaii Medical Center won a victory in U.S. Bankruptcy Court yesterday, overcoming protests by creditors who include Roman Catholic nuns who sold two hospitals to the company.

Judge Robert Faris approved HMC's disclosure statement for its plan of reorganization, ruling it provided adequate information for creditors. He said that approving it moved the case a step closer to conclusion rather than going "back to the drawing board" as some creditors had asked.

"We're really pleased that our disclosure statement was accepted," said Salim Hasham, HMC chief operations and restructuring officer, outside of court.

"We have a lot of work to do in coming weeks and will be working with our secured and unsecured creditors — St. Francis among them — to fine tune our reorganization plan."

HMC filed for bankruptcy in August, about 20 months after buying the former St. Francis Medical Centers on O'ahu. The seller, St. Francis Health Care System of Hawaii, has been critical of HMC during the bankruptcy and opposed approval of the disclosure statement, which provides details on HMC's reorganization plan.

HMC's majority owners are Cardiovascular Hospitals of America, or CHA, of Wichita, Kan., and 130 local doctors.

A creditors committee also objected to the disclosure statement. They said HMC didn't provide enough information on subjects such as its proposal to turn one of the hospitals into a nonprofit entity as proposed, whether financial projections were realistic if non-profit status isn't granted, and the amount of exit financing it has.

St. Francis also objected to HMC's plan to reduce what it owes to St. Francis. Hasham yesterday said HMC may seek to cut that amount by $10 million to $20 million.

St. Francis provided $40.2 million in seller financing, an $8.9 million working capital loan and a $1-million-a-year lease on the hospital properties when it sold the hospitals in Liliha and 'Ewa to HMC.

Faris noted the objections by some creditors yesterday, saying there were some serious impediments to the reorganization being confirmed.

"We were surprised that the judge approved the disclosure statement over so many objections and in light of his expressed concern that the plan from HMC presents difficulties for ultimate confirmation," said Sister Agnelle Ching, chief executive officer of St. Francis, in an e-mailed statement. "This bankruptcy creates a strain on St. Francis, the physicians and the community."

Faris set an August hearing at which the dispute over how much HMC will pay on St. Francis' claim will be discussed, along with setting a date for confirming the reorganization plan.

Ching pledged to work with all parties to bring the bankruptcy reorganization to a mutually beneficial conclusion, while Hasham said HMC is continuing to work with St. Francis.