South Nassau submits winning bid on LBMC

But nursing home operators outbid SNCH for Komanoff Center


South Nassau Communities Hospital submitted the winning bid to acquire the shuttered Long Beach Medical Center’s hospital facility at a sale auction on Tuesday, but was outbid on LBMC’s Komanoff Center for Geriatric and Rehabilitative Medicine by a pair of nursing home operators.

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.

On Tuesday, South Nassau submitted the winning bid of $11.7 million for the hospital. But officials with knowledge of the proceedings told the Herald that nursing home operators Michael Melnicke and Leo Friedman outbid SNCH and several other nursing home facilities on the Komanoff — which remains open and is considered more valuable — at $17.2 million. Two years ago, Melnicke and Friedman also bought the nursing home of bankrupt Peninsula Hospital Center, according to Crain’s New York Business.

“They are nursing home people and they are going to operate it,” said an official who asked not to be named.

A court hearing on the sale will be held on Monday, May 12 before Judge Alan S. Trust at 10 a.m., at the Al D’Amato U.S. Courthouse in Central Islip.

“I don’t know what South Nassau’s plans are,” the official said. “Who knows if they’re really going to put in an emergency room here — I don’t think you’re going to see an ER here for the summer.”

Burton Weston, an attorney representing South Nassau, did not immediately return a call for comment, but told Crain’s, “We are very satisfied with the outcome of the auction.”

In February, 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 had 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 maintain 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.

SNCH officials has said that they hoped to have the urgent care facility completed by the spring or summer, but a spokesman for SNCH declined to comment on the outcome of Tuesday's sale auction.

“We have no comment because we have to wait until a decision is rendered,” said SNCH spokesman Damian Becker.

Under the asset purchase agreement, hospital officials said that South Nassau was to acquire the operating license of the Komanoff Center. But with Tuesday’s auction, it seems unlikely that SNCH will make other attempts to acquire the Komanoff facility at Monday's sale hearing, an official said.

“The judge has to abide by what the creditors ... agreed to,” the official said. “I think it’s going to be automatic approval — unless South Nassau increases their bid for the Komanoff, but I don’t think they can because they already had an auction.”

“They lost it,” another source said of SNCH and the Komanoff. “South Nassau — didn’t really seem to be too disturbed by that. But everybody is glad that South Nassau submitted the winning bid on the hospital — but now, the question is, what’s South Nassau going to do with it?”