BILOXI -- Lead attorney Jim Reeves on Tuesday defended the recent federal settlement for retirees of the Singing River Health System to the Sun Herald. He said it's a good settlement in which he wants all 3,138 retirees and employees in the pension to participate.
The settlement is now in the hands of Chief U.S. District Judge Louis Guirola, who will decide if it is fair, reasonable and qualifies as a proper class action.
If the judge declares a formal class, then Reeves said he is hoping everyone will take the deal and retirees won't be allowed to opt out. It holds the hospital system accountable for money it did not pay into the pension plan, he said, and continues payments to retirees, their spouses and others named in the plan for years to come.
The settlement determined SRHS owed the pension $150 million and set up payback over 35 years, he said.
"We obtained financial records and hired experts to determine how fast they could pay it back reasonably," Reeves said. "Anything faster would probably have drove, in our opinion, Singing River to bankruptcy. And a bankrupt Singing River means the pension plan won't get the $150 million."
The hospital misrepresented pension statements to retirees for several years, Reeves said, an act that made them liable for making the pension whole in the settlement.
Reeves said he was "surprised someone hasn't yet gotten into criminal trouble over this," but that the District Attorney and other prosecutors have looked at it. That is not his arena, he said. He's a civil attorney, but he said SRHS would have had the right to terminate the plan legally, had the county-owned hospital system followed procedure.
SRHS not only failed to pay, he said, but it also withheld information on pensions investments from retirees and made bad investment decisions. Reeves said the settlement will set up fair treatment going forward.
The trustees for the hospital and trustees for the pension will be on separate sides of the table, so there's no conflict of interest, he said.
A special fiduciary agent is set over the pension and does not work for the hospital.
There's fresh leadership written into the agreement in the form of new trustees and a turn-around firm to oversee the hospital, which will be hired by Jackson County.
"I think you will see dramatic changes in that hospital (system) for the better, in very short order," Reeves said.
On the issue of taxpayers being on the hook for $13.6 million over the next eight years to offset the cost of indigent care, he said, most counties support their hospitals. And he said it's cheaper for the county to pay to get the hospital back on its feet than to risk a bond default that would cost the taxpayers a tax increase to cover $90 million in hospital debt.
"New trustees (appointed by county supervisors) means the county will not be handing over $13.6 million to the same guys who ran it into the ground to begin with," Reeves said.
He said retirees who are skeptical can have confidence the hospital has new leadership, a special fiduciary agent and court oversight.
"With those things, I think we've given the hospital the best possible chance to come out of this, survive, fund the pension plan and continue to function as a hospital."
This settlement has SRHS repaying every nickle it owes the retirees, he said.
"I think it is the best that can be done under the circumstances. The only thing that could be better in this deal is if we had them cut the check tomorrow, but they don't have the money."
He said retirees don't have to trust the hospital.
"For this settlement to go through it will be OK'd by the special fiduciary, approved by a state court, go through rigorous requirements and be approved by a federal district judge."
As far as the hospital system's future, he said, "I suspect you're going to see some dramatic changes in the hospital, some of them are going to be painful," but the turn-around has begun.