Long Beach Medical Center is expected to file for bankruptcy this month, a move that could pave the way for a 24-hour emergency department after a takeover of the facility by South Nassau Communities Hospital.
One official, who asked not to be identified, said that LBMC’s board of trustees agreed on Tuesday to move forward with an asset sale of the hospital under section 363 of U.S. Bankruptcy Code. “It was an asset purchase agreement with South Nassau and a decision to file for bankruptcy,” the official said.
Doug Meltzer, LBMC’s chief executive officer, confirmed the agreement. “The board ... approved an asset purchase agreement with South Nassau Communities Hospital [Tuesday] evening, and will continue negotiations with SNCH and FEMA representatives on the amount of money to be provided by FEMA for the restoration of healthcare services consistent with community need,” Meltzer said in a statement.
The official said that the bankruptcy filing could happen as early as next week. The move comes a week after U.S. Sen. Charles Schumer called on the Federal Emergency Management Agency to release $100 million in Hurricane Sandy relief funds it owes LBMC, saying that bureaucratic red tape is hindering a takeover deal of the closed facility by South Nassau that would restore emergency services on the barrier island. SNCH is looking to acquire LBMC and establish a 24-hour, 911-ambulance-receiving emergency department there, a facility that could open by late summer.
However, Schumer said that SNCH would not be eligible for the funds if LBMC declares bankruptcy and sells South Nassau the property and its assets, as expected. The official said that FEMA is expected to decide on Friday whether SNCH can use the funds to rebuild and make permanent repairs at the facility. The medical center 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 the emergency department.