This news brief appeared in the Daily Briefing of the New Jersey Lawyer Online, March 13, 2007

LEGAL TEAM KEEPS HOSPITAL DOORS OPEN USING INNOVATIVE BONDS

By law at least, hospitals undergoing restructuring in New Jersey have been able to issue state-backed “hospital transformation bonds” for more than 6½ years, but until this month no hospital had ever managed to do so. They relied instead on riskier bonds secured by their own assets. Now a team led by Michael D. Sirota and Gerald H. Gline from the Hackensack firm Cole, Schotz, Meisel, Forman & Leonard, in last-minute negotiations to keep the doors of the venerable Passaic Beth Israel Hospital open until its merger with neighboring St. Mary’s Hospital is complete, has put together a prototype financing package using the state-backed bonds. Beth Israel board chairman Mario Marghella said that keeping the hospital continuously open “would not have been possible without the skill, knowledge, energy and creativity” of the Cole Schotz team. In the negotiations, St. Mary’s was represented by Karen L. Gilman of Wolff & Samson in West Orange. Secured creditors were represented by Joseph Lubertazzi Jr. of McCarter & English in Newark, and unsecured creditors by Hal L. Baume of Fox Rothschild in Lawrenceville. 3-13-07