Joel R. Glucksman
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201-896-7095 jglucksman@sh-law.comFirm Insights
Long Beach Medical Center files for bankruptcy
Author: Joel R. Glucksman
Date: February 25, 2014
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New York’s Long Beach Medical Center announced that it has filed for protection under Chapter 11 of the bankruptcy law, according to Long Island Newsday. Hurricane Sandy did extensive damage to the medical center in October of 2012, forcing the facility to close down almost entirely, and it has remained essentially closed since the storm.
According to Bloomberg Business Week, the hospital’s debts were listed at $48 million in the documents filed with the U.S. Bankruptcy Court in Central Islip, N.Y. “The storm further exacerbated an already precarious financial situation and left the debtors in a situation from which they have not been able to recover,” said Douglas Melzer, the CEO of Long Beach Medical Center.
As part of its reorganization strategy, on Feb. 18, Long Beach Medical Center and South Nassau Communities Hospital had announced that a takeover, which they have been discussing since June, will take place. Under the proposal, South Nassau plans to acquire Long Beach Medical Center’s assets for $21 million and redevelop the campus, reported the news source. Plans for the redevelopment involve a freestanding 24-hour emergency center, including an urgent-care facility that could be open as soon as May. Damian Becker, a spokesperson for South Nassau, said that the filing “was a logical extension of the circumstances stemming from the destruction to the Medical Center caused by superstorm Sandy.”
Court papers noted that South Nassau’s offer will be submitted to the bankruptcy court for a court-supervised auction, according to the news source.
City Manager Jack Schnirman told Long Island Newsday that the city wants the emergency center to be open as soon as possible. “We want to have a seat at the table,” he said. The city is among those owed by the hospital, as a result of more than $600,000 in unpaid utility bills and other fees.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
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