U.S. Attorney, District of New Jersey on behalf of the Secretary of the U.S. Department of Health and Human Services advises Hoboken Municipal Hospital Authority that they are not in bankruptcy and therefore the Debtor

September 20, 2011- Ed Mecka - edmecka.com

The U.S. Attorney, District of New Jersey on behalf of the Secretary of the United States Department of Health and Human Services (“the Secretary”) submitted a Federal Bankruptcy filing to apprise the Purchaser and other interested parties of the consequences surrounding the Purchaser’s acceptance of the Provider Agreement or,alternatively, the Purchaser’s rejection of any such assignment and the Secretary’s opposition to anyattempt to transfer the Hospital’s Medicare Provider Agreement without successor liability.

"Moreover, because the Hoboken Municipal Hospital Authority (and therefore, not the Debtor) is the holder of the Medicare Provider Agreement and is not in bankruptcy, any transaction regarding the transfer of its Provider Agreement with the Secretary must take place outside the scope of this court’s jurisdiction."

USNJA-USDept-HealthLimitedResponsetorelated document90 - Main Document[1].pdf

How will the US Attorney, District of New Jersey legal opinon impact the overall HHI, Inc. Debtor bankruptcy filing?

It will be interesting to see how the Bankruptcy Judge rules with respect to the "legal argument that a creditor had a contract with the Hoboken Municipal Hospital Authority who is not a Debtor and not in Bankruptcy."

It is a fact that one or more creditors listed by Hoboken Healthcare, Inc. Debtor have filed OBJECTION TO THE DEBTOR’S MOTION FOR ENTRY OF AN ORDER APPROVING SETTLEMENT AND COMPROMISE claiming they have a valid, binding claim directly against the Hoboken Municipal Hospital Authority, a non-debtor, based upon a contract with the Hoboken Municipal Hospital Authority.  

HHI, Inc. Debtor was responsible for negotiating and entering into contracts with vendors and suppliers.  In court papers filed September 13, 2011 in Federal Bankruptcy Court, Olympus America, Inc. asserted a valid, binding claim directly against the AUTHORITY, a non-debtor who signed the contract.  If the Court agrees, the City of Hoboken may be responsible for payments in excess of $ 372,861.08.  HHI, Inc. Debtor was in apparent violation of the MANAGEMENT AGREEMENT that stipulated that HHI sign contracts.

It appears that vendors also signed contracts with Hoboken University Medical Center and have taken the legal position that HOBOKEN UNIVERSITY Medical Center is not a Debtor or in bankruptcy. 

If successful, the Hoboken taxpayers will be picking up the bill for the failures of the Hoboken Municipal Hospital Authority.