Sunday, September 18, 2011

Horse Sense: When does saving a hospital trump politics?

Hoboken feels like its in suspended animation on the outcome of its hospital sale.  The crux of the matter seems to some to be beyond comprehension - Hoboken University Medical Center is on a respirator and needs a transfusion to see its health restored.  Only the finalization of a sale to the highest bidder, Holdco's $91.7 million will see it through.

Due to Hoboken's constant electioneering environment, the fuel added to this bubbling over toxic brew is causing the kettle's flames to dance ever brighter and higher.  The added ingredient is money: specifically $34 million owed to creditors including one attorney who was counsel to the hospital's management arm and a union local that is infuriated to see itself on the creditors list in seven figures.

Stand or Fall?  There's no middle ground in the timeline required to complete a sale of the hospital.  In the next few weeks it either goes through or the hospital will not be able to stop its doors from closing.  

It's one thing when the Hoboken taxpayers were in the line of fire, no one among the recent voices yelling foul felt compelled to speak on their behalf with the red ink piling up in the tens of millions in a single calendar year.  At hospital board meetings we sat sometimes as the only reporter and or member of the public and always asking the question, "How much is the accounts payable?"

The numbers were always growing and the answers were always the same downplaying its expansion.  "Monies are always coming in and going out," we were told in assuring calm tones.  Yet that figure kept growing and two consecutive years of state aid, itself an unusual event thanks to the efforts of the mayor and hospital executives pleading the case to the State did nothing to stem the slowing but steadily growing losses.

The figures kept climbing, $12 million, 13, 14, 15, 16... even millions in state aid did not stem their growth.  In the end when the sale to a bidder was eminent, a decision was made to stop the final number at $24 million in accounts payable.  Add in the other related areas and the final figure owed to creditors hits a whopping $34 million.

30K is a small figure in that total but it also happens to be a number owed to a certain lawyer's firm who recently served as the counsel to the hospital's management arm.  Apparently he has an interest is in seeing that bill paid in full, and also believes the structured legal limitations on the hospital via its board should not keep him and other creditors from reaching out and touching the Hoboken taxpayer for 100% of the amount.

Last week the bankruptcy judge decided turning on your client and hanging out with the creditors was not such a good thing, calling that "ill advised" and refusing to allow the attorney to be deposed.  (Silence is golden Donald.)

This Wednesday in Federal Court, a bankruptcy judge will look to find a figure more palatable to all sides heading closer to the $34 million and resolve the matter.  The number he'll likely conclude will be in the double digits in millions.  This is hardly perfect but it's better than many bankruptcies would see.  Holdco already invested with a million dollar downpayment and millions more in fees must aid in that final tally.

Pending the settlement of the bankruptcy, required approval by the State will be needed before a sale can be consummated.  It will come not a moment too soon.  The hospital is coming down to the wire on its lifeline.  All the political chatter in Trenton by union supporter State Senator Loretta Weinberg is just more noise added to the awful pathologies being pumped out locally by Councilwoman Beth Mason.

In the coming weeks, there will be either great or dismal news.  People are working furiously to see the sale though while others are sitting back playing games or worse, anxious to see failure.  The sale is either completed and the hospital gets a seven year lease on life or if it's stalled for any reason, the hospital closes.

Anyone telling you otherwise is just ignorant or plain lying.  As for those voices who said the bankruptcy was forced, they'll quickly change the subject after a hospital closure and point the finger.  Perhaps that's been their game plan all along.