Foundation money will provide help
Trumbull County Probate Court Judge Thomas Swift’s release of Trumbull Memorial Hospital Foundation money is a relief after concerns that the funds would be lost in the former Forum Health’s bankruptcy and subsequent sale to Community Health Systems.
Swift released more than $11 million that was frozen for almost four years. The money will be distributed by the Community Foundation of the Mahoning Valley, a long-standing, reputable clearinghouse for local charitable endeavors. The money will be used to help residents of Trumbull County deal with health-related issues.
Much credit goes to the Trumbull Memorial Hospital Foundation, especially Board of Directors Chairman David Kostolansky, for convincing the Ohio Attorney General’s Office to support its case with Swift.
This was a close call for the TMH Foundation money. The money was benevolently donated by hard-working, caring residents, then unwisely put up as collateral against $100 million in loans from JPMorgan Chase, U.S. and Fifth Third banks. Forum Health entered bankruptcy in 2009 and less than a year later the hospital system was bleeding about $1 million per month in fees for attorneys, accountants, consultants and other professionals.
The creditors naturally wanted to collect on that collateral but the debts were satisfied when CHS purchased Forum for $120 million. A big bullet was dodged in March of 2011 when bankruptcy judge Kay Woods ruled that all but $1 million of the TMH Foundation and the Western Reserve Health Foundation, also part of Forum Health, was safe from unsecured creditors – utility companies, medical equipment suppliers, landscapers, food vendors, etc. – who claimed Forum Health had a duty to use the foundations’ money to pay claims.
The community is fortunate that Ohio Attorney General Michael DeWine supported the foundations, saying that as charitable trusts, their funds can be used only for charitable purposes, and that Woods agreed with him.
But that still left the foundations, like dozens of others throughout the Mahoning Valley, unable to fulfill their original purpose. TMH Foundation, for example, accepted donations to help cover a wide range of public benefits, including health care costs of uninsured patients, buying medical equipment and sponsoring scholarships, at the non-profit Trumbull Memorial Hospital. Once TMH became the for-profit Valley Care, the intended purpose of the donations no longer existed.
The restated purpose that the Community Foundation will fulfill closely resembles what donors intended which should satisfy all the generous benefactors in Trumbull County.