St. Francis Healthcare System of Hawaii and other creditors have won the right to file their own plans for bringing Hawaii Medical Center out of bankruptcy.

A committee of unsecured creditors was successful yesterday in arguing Hawaii Medical Center should not be granted more time to exclusively work on a plan of reorganization and get creditors to sign off on it.

"We're very pleased with the court's decision today," said Sister Agnelle Ching, chief executive officer of St. Francis Healthcare System of Hawaii, which sold the two hospitals in Liliha and 'Ewa to a group consisting of Cardiovascular Hospitals of America and 130 local doctors.

"This opens the door for us to put together and submit our own plan, which will be beneficial for other creditors, the community and our healthcare system."

The ruling by U.S. Bankruptcy Judge Robert Faris was a setback for HMC, which in late March filed its own plan that included turning the Liliha location into a nonprofit hospital and reducing what it owes St. Francis. At the morning hearing, HMC's attorney's argued for more time to exclusively work on a reorganization plan.

After the hearing, HMC said the judge's ruling will allow the best plan to emerge from the court.

"While we believe that our plan offers the best option for Hawaii Medical Center to thrive and continue to serve the community, we know that others have their own ideas for restructuring, and we welcome their participation in the process," said Salim Hasham, HMC chief operations and restructuring officer.

"Over the last few weeks, we have been working with our secured and unsecured creditors to find a solution that is in the best interest of our patients and our hospitals."

Hasham said HMC knew there would be stakeholders with their own ideas, while noting HMC's management had made progress on its own cutting losses and improving efficiencies.

"Our goal throughout the restructuring process has been to reorganize our facilities into smaller, more efficient hospitals that can sustain themselves, and continue to serve our patients and the community."

HMC did not spell out in its plan how much it would reduce payments to St. Francis, but Hasham has previously said outside of court that it may ask for a $10 million to $20 million cut.

St. Francis had provided $40.2 million in seller financing, an $8.9 million working capital loan and an annual lease of $1 million a year on the properties beneath the hospitals.

Ching noted Faris had accepted a disclosure statement linked to HMC's reorganization plan on June 22 over the objections of the creditors committee. She said Faris denied HMC's request for more time yesterday because the plan was not confirmable and that having alternatives presented would help bring the bankruptcy to faster conclusion.