The bankruptcy of Hawaii Medical Center took a surprising turn yesterday when its former owners filed a plan of reorganization that proposes taking back the two hospitals.

St. Francis Healthcare System of Hawaii filed a plan in Bankruptcy Court that proposes regaining ownership of its former namesake hospitals and said it plans to find a new manager to oversee their operation.

"What we're trying to do is what's best for the community," said Jerry Correa Jr., St. Francis Healthcare chief administrative officer.

The filing was the latest twist in the Chapter 11 reorganization of Hawaii Medical Center, which filed for bankruptcy a little more than a year and a half after buying the former St. Francis Medical Centers in Liliha and 'Ewa.

St. Francis Healthcare's filing came about an hour and a half before a court hearing at which other reorganization plans were to be considered for submittal to creditors for voting. It resulted in Judge Robert Faris continuing the proceedings until next month.

Hawaii Medical Center's reorganization plan proposes the possible sale of the 240-bed hospital in Liliha, along with an adjacent building.

The other plan filed by unsecured creditors seeks to strip Hawaii Medical Center of its ownership and have the hospitals under a nonprofit corporation. Hawaii Medical Center is made up of Cardiovascular Hospitals of America and 132 local physicians.

Both of the plans also could involve lowering the amount that's owed to St. Francis Healthcare, which provided Hawaii Medical Center $46.3 million in seller financing to complete the transaction and is to be paid $1.1 million in lease payments.

Attorneys for both Hawaii Medical Center and the unsecured creditors complained in court that St. Francis Healthcare had done little to work with them on resolving differences during the bankruptcy.

"I'm very disappointed St. Francis filed their plan this morning," said Craig Freeman, an attorney for the unsecured creditors committee who traveled from New York for the hearing.

Correa said St. Francis Healthcare has been working behind the scenes on its plans and attempting to find an operator who would manage the hospitals, should it regain ownership.

He said about a dozen operators from here and elsewhere had been vetted, but none had committed to St. Francis Healthcare because of the economy and uncertainty posed by health care reform. Anyone chosen would have to help with investments in the hospitals, he said.

"We have been working hard to find somebody," Correa said.

St. Francis Healthcare was founded by the Sisters of St. Francis in 1883 and today is involved in a number of health-related ventures, including hospice and home health care.