Former employees of East Ohio Regional Hospital filed an involuntary bankruptcy petition in the U.S. Bankruptcy Court for the Southern District of Ohio on Aug. 28 to protect employee wage claims and bring transparency to the hospital’s finances.

Under federal law, employees’ unpaid wages move into a priority status in bankruptcy, ahead of other unsecured creditors, provided the bankruptcy proceeding is initiated within 180 days of the date the wages became due.

“This step was necessary to make sure employees have the best chance to recover what they are owed,” said Bob DeRose, an attorney with the Columbus, Ohio law firm of Barkan Meizlish DeRose, LLP. “It also ensures that the hospital’s accounts and assets will be examined and monitored by a federal bankruptcy trustee. Our message is simple: workers come before profits, and every dollar will now be under federal court oversight.”

Gold, Khourey & Turak, LC attorney Michelle Marinacci added: “We told multiple hospital representatives that the involuntary bankruptcy was imminent if the hospital did not resolve the wage claims before the statutory deadline for securing the priority of the employee’s wage claims in a bankruptcy proceeding. The hospital chose not to respond and not to take any action to pay the employees what they are owed.”

In connection with the filing, the former employees also sought the immediate appointment of an interim trustee to secure and protect the hospital’s assets. After a three-and-a-half-hour hearing on Aug. 29, United States Bankruptcy Court Judge Tiffany Strelow Cobb, granted the employees’ motion and appointed an immediate interim trustee.

Following the hearing, Attorney Patrick Carothers with the law firm of Carothers & Hauswirth, LLP, briefly discussed the Judge’s ruling.

“An interim trustee may be appointed at the early stage of an involuntary bankruptcy case if it can be shown that one is necessary to protect and preserve the assets of a company,” he said. “On Friday we argued, and the court agreed, that under the circumstances, current management was not well suited to perform the ‘protect and preserve’ role and that an independent trustee was needed.”

This action applies only to East Ohio Regional Hospital. Claims against other related parties–including Dr. John Johnson, Nithin Johnson, Access Ohio, LLC, and its affiliates, and Arcbridge Capital, LLC–remain active in U.S. District Court in Columbus.

Return to timesleaderonline.com later for more on this developing story.