Forum’s unsecured creditors can’t have $12 million, judge rules


The unsecured creditors of Forum Health will not be allowed to siphon off more than $12 million in unrestricted donations to charitable foundations that supported Forum Health’s Northside Medical Center and Trumbull Memorial Hospital, U.S. Bankruptcy Judge Kay Woods has ruled.

The ruling, announced today, came in an order from the judge granting motions by the Western Reserve Health Foundation and the Trumbull Memorial Hospital Foundation to be dismissed from the Forum Health bankruptcy case.

“Unrestricted funds held by TMHF and WRHF cannot be used to pay the creditors of other debtors,” the judge wrote. “TMHF and WRHF are separate and distinct non-profit corporations, which have operated exclusively for their charitable purposes,” she wrote.

“No bankruptcy purpose would be served by the continuation of the bankruptcy case,” of either foundation, the judge ruled.

The judge’s ruling was posted less than 72 hours after a Tuesday hearing on the dismissal motions.

Having gone through Chapter 11 bankruptcy, Forum’s hospitals were sold last fall to Community Health Systems, a Tennessee-based for-profit business.

The unsecured creditors are suppliers of goods and services to the Forum hospitals.

In their motions to be dismissed from bankruptcy, the foundations said they’ll no longer seek to support the hospitals, now that a for-profit business owns them.

Rather, the foundations said they’ll seek to improve the health status of the Youngstown-Warren community.

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