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The Honolulu Advertiser
Posted on: Wednesday, May 26, 2010

Hawaii Medical Center bankruptcy plan wins approval by judge

Advertiser Staff

A blueprint for Hawaii Medical Center's exit from bankruptcy was approved by Judge Robert Faris this morning after a lengthy battle over how to reorganize the operator of hospitals in Liliha and 'Ewa.

The plan calls for stripping its current owners of their equity while converting the hospitals to nonprofit status, a move that will save the operation on general excise and other taxes paid the state.

A nine-member board would also oversee the two hospitals that had been run on a for-profit basis by a ownership group comprising Kansas-based Cardiovascular Hospitals of America and a group of local doctors.

The group bought the hospital in January 2007 with the help of $40 million of seller financing provided by the hospitals' former owner, Saint Francis Healthcare System. But they were unable to staunch financial losses and filed for bankruptcy in August 2008.