Community Health Systems Monday evening made it a two-horse race to buy bankrupt Forum Health after an unnamed subsidiary submitted a "substantial bid," a spokeswoman said.
The development was announced only hours after the state attorney general gave his approval to the bid made by another interested buyer.
Tomi Galin declined to say how much the Nashville, Tenn.-area for-profit hospital system bid for Forum, although she said the bid was submitted last week. Forum Health announced the bid in an e-mail Monday evening.
"We are very interested in the health system and its hospitals and hopeful that we will be the successful bidder," Community Health said in an e-mailed statement. "We look forward to participating in the process in the days ahead, and are also continuing our discussions with the unions. We are excited about the possibility of becoming a healthcare partner for the Youngstown community.
Forum stressed the sale process isn't complete, adding it will continue to accept additional bids that meet the court process. It said it will review all bids received before today's 5 p.m. deadline to determine if they qualify to be part of an auction.
The bid puts Community Health - the nation's largest hospital system with 123 facilities in 29 states - in head-to-head competition with Ardent Health Services, another Nashville, Tenn. for-profit hospital system that is the lead bidder for nonprofit Forum with a $69.8 million offer. A competing bid must top Ardent's bid by at least $3.5 million.
An auction is scheduled for 10 a.m. Thursday in the downtown Cleveland office of Forum's legal counsel McDonald Hopkins. A hearing in Woods' court to rule on the winning bid is set for Aug. 10.
Ardent, which announced its offer on June 10, also has committed to investing $50 million to $70 million to upgrade Forum's buildings and equipment over five years.
It promised to operate Forum's three hospitals in their current manner, as well as continue providing care for emergency room, Medicare and Medicaid patients.
Ardent also holds labor agreements ratified by Forum's seven unions that take effect if its bid is approved.
Before Community Health's bid was revealed, state Attorney General Richard Cordray Monday filed in federal bankruptcy court a favorable opinion of Ardent's offer.
In a news conference in downtown Youngstown, Cordray said he hasn't received formal notice of any other bidders and hasn't had any communication with Community Health.
Galin said Forum will submit Community Health's bid to Cordray's office to be reviewed.
Cordray said any other bidders must provide information to his office quickly. He noted it took seven weeks for his office to review the Ardent offer, a process aided by Ardent's full cooperation. He declined to estimate how long it would take to review another offer.
The attorney general has said federal bankruptcy law requires an ownership change to be done according to state law, which includes his approval.
Cordray said Ardent's offer is in line with Forum's original charitable purpose because proceeds of the sale will be used to help pay down existing debt.
"Since the debt was incurred as a result of Forum's healthcare operations, the use of the proceeds toward such debt is fully consistent with the charitable purposes of Forum Health," he wrote.
Forum owes its secured lenders about $129 million, although the net amount totals roughly $85 million after deducting a reserve fund established to service the debt.
Galin said Community Health intends to continuing operating Forum's three hospitals - Trumbull Memorial Hospital in Warren, Hillside Rehabilitation Hospital in Howland and Northside Medical Center in Youngstown - in pretty much the current form.
She said the company pledged to make capital investment in excess of $80 million over the next five years.
Unions representing about 2,825 of Forum's nearly 3,700 workers have sharply criticized Community Health for not bargaining in earnest since the system was identified as a potential bidder in mid-July.
Galin said discussions between Community Health and the unions are "ongoing. It's certainly our desire to reach agreements with the unions."
She declined to say if Community Health would accept the same terms Ardent has reached with the unions.
Forum Health's union officials gathered together Monday afternoon in Austintown to voice their disapproval of the health system being sold to Community Health but reaffirm they are willing to talk with the new bidder.
Debbie Bindas, staff representative of American Federation of State, County and Municipal Employees Ohio Council 8, which represents about 1,200 workers at Trumbull Memorial and Hillside, said Community Health notified the union Monday evening that it would like to meet again but offered no day or time.
She said the union gave a written proposal to Community Health Friday but got no response.
''It has been apparent to us they are unwilling ... or unequipped ... to engage in any competent discussion with us," said Cathleen Slater, an official with the Ohio Nurses Association.
Concerns were also raised regarding other CHS-run health systems, especially the 17 that are union.
''There are problems ... NLRB (National Labor Relations Board) charges that CHS has refused to acknowledge,'' said Bindas of the 17 organized facilities.
Tom Connelly, president of 425-member AFSCME/United Nurses of America Local 2026 at Trumbull Memorial, said the union is "willing to talk to anybody, but this company hasn't talked to us. The ball's in their court. We want to be good employees to anyone who wants to keep these facilities for the community."
Anthony Caldwell, spokesman for the 1,100-member Service Employees International Union, said workers "stand committed to meet with any potential buyer" but said the company hasn't offered any days to meet.
He noted Community Health has a history around the country of cutting not only indigent services but also for trauma and maternity.
"Primarily, our concern is preserving care for the community," he said.
A call to CHS Monday night about the union's comments was not returned.
Tribune Chronicle reporter Joshua Flesher contributed to this report.