Cases & Deals

MBIA Insurance is secured creditor in Forum Health chapter 11 case

Client(s) MBIA Insurance Corporation

Jones Day represented MBIA Insurance Corporation ("MBIA") as a secured creditor in the chapter 11 cases of Forum Health and its affiliated debtors (together, "Forum" or the "Debtors"). The Debtors comprise a regional health care system, including three hospitals, and are engaged in the provision of health care related services in Trumbull, Mahoning and Columbiana counties in the greater Youngstown, Ohio area. Forum's chapter 11 cases were filed with the United States Bankruptcy Court for the Northern District of Ohio on March 16, 2009 (the "Petition Date"). Prior to the Petition Date, the Debtors financed capital projects and the defeasance of certain outstanding bonds issued on behalf of certain of the Debtors with proceeds from four series of tax-exempt hospital revenue bonds issued by Mahoning County, Ohio in 1997 and 2002.

MBIA provides credit enhancement for the debt obligations in the form of bond insurance for two of the series, which, together, have a gross amount outstanding of over $100 million. As a result, MBIA is the largest creditor in these cases. With Jones Day's help, MBIA obtained an agreed final order authorizing the Debtors' use of cash collateral and the termination of the Debtors' exclusive periods. Furthermore, Jones Day also assisted MBIA in, among other matters: (a) negotiating the retention of an investment banker by the Debtors with necessary health care experience to explore all options for maximizing value; (b) negotiating the replacement of the Debtors' chief executive officer; (c) negotiating extensions for the continued consensual use of cash collateral; and (d) various other matters. Jones Day is currently assisting MBIA with evaluating an M&A process and the negotiation and formulation of a plan of reorganization acceptable to MBIA and the other secured creditors.