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Mostly Cloudy City has ‘seat’ at LBMC bankruptcy hearings
L.B. officials want to see opening of 911-receiving emergency center at the site
On Feb. 18, a day before the Long Beach Medical Center filed for bankruptcy, the City Council voted unanimously to retain outside legal counsel to represent the city at the hospital’s bankruptcy proceedings, as officials advocate for the return of a medical facility to the site.
The city is also a substantial creditor, with officials saying that LBMC owes it $600,000 in utility fees and other costs.
The medical center’s filing set the stage for a potential takeover of the facility by South Nassau Communities Hospital and the opening of a 24-hour emergency department operated by South Nassau.
LBMC’s board of trustees agreed to sell the hospital’s assets to SNCH for $21 million, according to papers filed under section 363 and 365 of U.S. Bankruptcy Code. On Feb. 19, the hospital and the Komanoff Center for Geriatric and Rehabilitative Medicine each filed for Chapter 11 protection in U.S. Bankruptcy Court in Central Islip.
LBMC and South Nassau have been in negotiations since last summer, and worked on an asset-purchase agreement in which SNCH would buy the hospital’s property, buildings and equipment, paving the way for the construction of an emergency department.
SNCH spokesman Damian Becker told the Herald that under the agreement, South Nassau would acquire the operating license of the Komanoff Center, which, unlike the hospital, reopened last year. Becker explained that SNCH must acquire the hospital property in order to build the emergency department, which would be preceded by the opening of an urgent-care center at the site sometime this spring. The asset-purchase agreement requires regulatory approval as well as the approval of a bankruptcy court and any creditors, officials said.
According to court documents, however, although LBMC is seeking approval to sell its assets to South Nassau, other corporate entities may also bid on those assets.
City officials said that the bankruptcy process is expected to play a large role in determining “how the facility will move forward and what the future will hold for a medical facility at that site.”
