LBMC bankruptcy hearing adjourned to May 12

A bankruptcy sale hearing that is expected to determine the fate of the Long Beach Medical Center property and its facilities has been adjourned to May 12.

In February, the Long Beach Medical Center — which has remained closed since Hurricane Sandy — filed for bankruptcy, setting the stage for its potential takeover by South Nassau Communities Hospital. The filing could lead to 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. LBMC and the Komanoff Center for Geriatric and Rehabilitative Medicine each filed for chapter 11 protection in U.S. Bankruptcy Court in Central Islip.

LBMC, which is privately owned, and South Nassau have been in negotiations since last summer 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.

Hospital officials say 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 year. Under the agreement, hospital officials said that South Nassau would acquire the operating license of the Komanoff Center, which, unlike the hospital, reopened last year.

The asset-purchase agreement would require regulatory approval as well as the approval of a bankruptcy court and any creditors, officials said. Among those creditors is the City of Long Beach, with officials saying that LBMC owes it $600,000 in utility fees and other costs. The City Council voted unanimously in February to retain outside legal counsel to represent the city at the bankruptcy proceedings, as officials advocate for the return of a medical facility to the site.

In addition to SNCH, bids on the hospital’s assets were also open to other corporate entities; the deadline to submit bids was April 24, and a source with knowledge of the proceedings said that several nursing home facilities, which were not disclosed, submitted bids on the Komanoff Center, though SNCH remained the sole bidder on the hospital.

A sale hearing was initially scheduled for May 1; an auction has been scheduled for May 6, according to a source, and the rescheduled hearing will be held on May 12 before Judge Alan S. Trust at 10 a.m., at the Al D’Amato U.S. Courthouse, 290 Federal Plaza, room 960. The hearing is open to the public.