Joel Freedman upended the Hahnemann University Hospital bankruptcy, firing Hahnemann’s chief restructuring officer and two outside managers who have been overseeing the shell of a business for the last two years, The Philadelphia Inquirer reported. A lawyer involved in the bankruptcy case called Freedman’s move retaliation for a lawsuit filed against Freedman seeking the return of an unknown amount of money to the bankruptcy estate. The suit against Freedman, filed in the U.S. Bankruptcy Court for the District of Delaware, was sealed, so the amount is not public. “What has transpired over the last number of hours is simply deleterious to this estate, was completely retaliatory,” Andrew Sherman of Sills Cummis & Gross PC told Hon. Mary F. Walrath at an abbreviated hearing. Sherman represents Hahnemann’s unsecured creditors. Sherman worried that Freedman could, theoretically at least, “compel the debtors to dismiss the lawsuit that was just filed” against him, potentially reducing the amount of money that will be available for vendors and others Sherman represents. Claims in the case are expected to be near $300 million, but it’s too soon to say how much money will be available to pay them. By firing the managers overseeing the remains of the hospitals he bought in 2018, Freedman introduced uncertainty into who is in charge as the case moves forward. Also Wednesday, Freedman filed a motion under seal asking the court to appoint a bankruptcy trustee to oversee the case as it winds down. The trustee would replace Saul Ewing Arnstein & Lehr LLP, the firm Freedman chose two years ago to handle the bankruptcy. That would cut off fees to Saul Ewing, which sued Freedman and in April alone billed $450,000 in fees and expenses for work on the case.
