Delaware Bankruptcy Court Transfers Venue of CHA Hawaii, LLC Case to Hawaii
This morning, the United States Bankruptcy Court for the District of Delaware granted the motion of the largest creditor of the estates of CHA Hawaii, LLC and its affiliated debtors to transfer venue of the case from Delaware to the District of Hawaii. St. Francis Healthcare System of Hawaii, which is the largest secured creditor in the case, with an unpaid debt due of approximately $65,000,000, filed the motion to transfer the case.
CHA Hawaii, LLC, a Delaware holding company, and its affiliated debtors who are located in Hawaii, filed their cases on August 29, 2008. Two of the debtors operate critical care hospitals in Hawaii. St. Francis filed its motion on September 5, 2008.
The Honorable Peter J. Walsh ruled this morning at the outset of the omnibus hearing scheduled in the cases. Judge Walsh ruled on the papers, without hearing oral argument. Among the facts that Judge Walsh cited as supporting his decisions were:
- the debtors' only connection to Delaware was the holding company, which is incorporated in Delaware, but located in Wichita, Kansas.
- 28 of the top 50 creditors of the debtors are located in Hawaii, and their claims amount to approximately three-quarters of the total claims in the cases
- the statutory patient care ombudsman will almost certainly be a resident of Hawaii
- the two largest creditors in the cases wanted the transfer
- all operating assets, records and accounts are located in Hawaii
- the six-hour time difference between Hawaii and Delaware creates difficulties for creditors who wish to participate in proceedings before the Court
- issues arising under Hawaii state law are better handled by the Hawaiian court
- the State of Hawaii favored the transfer
- six of the top ten creditors are in Hawaii
- none of the top 50 creditors are located on the east coast
