Hawaii Medical Center said it is considering selling the former St. Francis Medical Center in Liliha as it looks for a way to exit bankruptcy.

The owner of hospitals in Liliha and 'Ewa has filed a new bankruptcy reorganization plan that contemplates a sale of the 240-bed hospital, now called Hawaii Medical Center East. The sale would include an adjacent building, the Mother Marianne Wing.

Hawaii Medical Center would not say how much it would accept for the facilities, but that the sale is one option it is pursuing as it looks for ways to strengthen its finances. The sale of the hospital would only occur if the reorganization plan is accepted by creditors and if acceptable offers are made for the facilities.

"It is important to note that these alternatives are a work in progress," Salim Hasham, Hawaii Medical Center chief operations and restructuring officer, said in a prepared statement.

"The nature of the final agreement — between HMC and the various stakeholders — will not be finalized until a plan is voted on by creditors and accepted by the court."

Hawaii Medical Center drew up the plan after its initial reorganization blueprint was met with broad criticism from creditors, who also won court approval to submit their own reorganization ideas. It is possible that creditors may draw up their own plans to compete with HMC's for approval from U.S. Bankruptcy Court Judge Robert Faris.

HMC acknowledged the creditor resistance as the reason why it submitted a new plan. The for-profit hospital operator made up of Kansas-based Cardiovascular Hospitals of America and 130 local physicians bought the Liliha and 102-bed 'Ewa hospital from St. Francis Healthcare System of Hawaii in January 2007, with the help of seller financing.

In August 2008 it filed for bankruptcy, saying it owed lenders $51.1 million and vendors another $19.6 million. The hospital management has tried to lower costs since that time, cutting the number of beds it fills and reducing staff, but is still losing money.

The reorganization plan panned by creditors envisioned the Liliha facility becoming a nonprofit operation, while keeping the 'Ewa hospital a for-profit entity.

The latest plan said it will seek a buyer for the Liliha medical campus if it is unable to refinance or sell the $46.3 million of loans it has with St. Francis, a healthcare system founded by Franciscan Sisters.

The company could start soliciting letters of intent for the sale of the hospital and Mother Marianne Wing housing dialysis, laboratory and cardiac catheter services as soon as next month.

It would use proceeds to pay down debt owed to St. Francis to about $42 million, while paying another lender, Siemens Financial, $3.92 million of what is owed.

HMC also said another option may be to transfer ownership of the Liliha facility to St. Francis Healthcare System as partial payment.

Other aspects of the plan are similar to what HMC previously proposed, including paying vendors 70 cents on the dollar of what they are owed and possibly seeking a court ruling on reducing or disallowing some of what is owed St. Francis.

St. Francis has been critical of any effort to reduce what it's owed, but didn't immediately have a comment yesterday. HMC said it is in discussions with St. Francis on a settlement of claims, but that it is not known what that might be at this time.