Trade vendors in the Auburn Memorial Hospital bankruptcy case should receive 20 percent repayment in a one-time allocation later this year as part of the settlement plan reached with unsecured creditors, an attorney representing creditors in the case said.

AMH had announced broader details of the agreement early Friday that covered $42 million in unsecured debt, but the bulk of that debt is owed to the federal Pension Benefit Guaranty Corp. In total, AMH has agreed to pay $12 million on the debt over 20 years, or $6 million if it can make the payment within three years. Hospital officials are confident they can make the discounted payment, which would amount to about 14 cents on the dollar of unsecured debt it owes.

Martin Bunin, an attorney representing the committee of unsecured creditors in the case, said the total repayment plan will also include a one-time distribution to unsecured trade vendors, which are businesses such as local contractors who have been owed money by the hospital for debts incurred prior to its April 2007 Chapter 11 filing. Bunin said those trade vendors would get roughly 20 cents on the dollar, up from the 7 cents that had been proposed by AMH last month.

“It's a good result for the vendors, and it's a good result for Auburn because the hospital can afford this and still have access to the capital it needs to continue making the improvements it is making,” Bunin said.

Bunin and the hospital have been negotiating the terms of a reorganization plan. “The people of Auburn should know that the hospital's CEO (Scott Berlucchi) and especially John Baran (chief financial officer) are zealous advocates for your hospital,” Bunin said.

Hospital officials said the agreement should clear the way for the hospital to emerge from bankruptcy in mid-July. Bunin said that sounds like a realistic timetable, and he was confident the trade vendors would receive their payments before the end of the year.

Baran was especially pleased to have a deal to settle the PBGC debt at a discounted cost to the hospital.