Despite Objections, Landmark Deal Moves Forward

Judge Michael Silverstein gave preliminary approval today for the purchase of Landmark Medical Center by Steward Health Care System of Boston, despite objections by a representative from Blue Cross Blue Shield of Rhode Island (BCBSRI) and a representative from a new potential bidder, IJKG Opco, LLC.

The decision represents a major move forward for the struggling city hospital which has been in receivership for the past three years. 

Special Master Jonathan Savage for an emergency petition for instruction on an offer for between $62 million to $66 million by Steward, now the owner of Caritas Christi Healthcare, in a deal he described as "ideal."

Savage told Judge Silverstein that he wanted to move forward with the sale in spite of a call this morning from IJKG, Opco LLC of Bayonne, NJ  saying they would pay more. 

 "At this late stage, I would not be inclined to upset the apple cart," said Savage. "At this point, I feel it would add to the instability."

Additional objections were raised by Joseph Diorio, an attorney representing BCBSRI. Negotiations for Caritas Christi to purchase the facility were dropped last December when the hospital chain said they were unable to work out a deal with the insurer, which provides coverage for an estimated 20% of Landmark's patients.

"I don't know how we're going to be treated," said Diorio. The group filed an official objection with the court this morning calling the deal "materially different and inferior" to other offers for purchase of the facility. 

"There are very few hospitals in Rhode Island that can survive without Blue Cross," Silverstein replied, calling the company's interests "protected."

Christopher Callaci, counsel for United Nurses and Allied Professionals, who testified last week regarding the urgency of the situation and at the hospital, reiterated his statements this afternoon.   

"Since the news on Friday that Steward has emerged, hope has risen. I hope the court does authorize Mr. Savage to move forward," Callaci said.

Silverstein approved the transaction, which will now be reviewed by state regulators, a process expected to take from six to nine months.

Asked about the hospital chain's intentions for the facility, Bob Guyon, Chief Operating Officer for Steward replied, "In the 20 years that our system has been around, we have never left a hospital once we acquired it. We have been successful 100% of the time."