HOBOKEN – In a special meeting on Thursday night, the Hoboken City Council voted 5-3 to affirm a special legal contract with Okin, Hollander and DeLuca at a rate of $540 per hour, and also voted to approve a settlement of the city’s $2 million claim in the bankruptcy of Hoboken University Medical Center’s operator, Hudson Healthcare Inc. (HHI).
HHI filed for bankruptcy on Aug. 1, naming approximately 5,000 creditors. The city is owed approximately $2 million.
Under the terms of the settlement, the city wouldn’t receive any of its $2 million claim, and would in turn not be liable for lawsuits from creditors in the bankruptcy. The HHI, the non-profit manager of the hospital that claimed bankruptcy, would be responsible for settling the bankruptcy claims, even though the city is the chief bond guaranteer for the hospital’s operations.
Mayor Dawn Zimmer has said that the claims have to be resolved before the transfer of ownership can be completed.
The council voted in 2008 to save the hospital from closure by guaranteeing $52 million in bonds to keep the facility open after the former owners said it would shut down for financial reasons. The Hoboken Municipal Hospital Authority, whose members include the mayor, is now selling the hospital to a private buyer to relieve the taxpayers of the $52 million bond guarantee, and now only needs the commissioner of the Department of Health to issue a Certificate of Need. Then the sale to HUMC Holdco, a group that also owns Bayonne Medical Center, is complete.
Paul Hollander, the new special legal counsel for the city, said on Thursday he has already worked 25-30 hours. Zimmer is permitted to hire an attorney on an emergency basis for up to $17,500. The council will see another resolution for payment after the limit is reached, officials said on Thursday.
Councilman Michael Russo said he was disappointed that the council hasn’t been privy to the discussions of the sale all along, even though they have been asking for inclusion for months. Russo, along with Councilwoman Theresa Castellano and Councilman Tim Occhipinti, voted against the two measures.
Councilwoman Beth Mason was absent from the meeting, and council members Carol Marsh and Peter Cunningham joined the meeting by phone.
Councilwoman Jen Giattino voted in favor of the two resolutions, saying that the city shouldn’t have the liability of the hospital over their heads anymore.
Council President Ravi Bhalla voted in favor of the claim and the attorney’s contract, saying it’s “unconscionable and reckless to not move forward.”
The $2 million includes money the hospital owed to the Parking Utility. – Ray Smith