Legal separation

The Lake Erie Regional Health System of New York announced Thursday morning that its board decided to re-create a separate TLC Health Network board to operate Lake Shore Health Care Center, providing the best chance for the hospital’s sale, job retention and continued operations. This may also have implications on the bid to purchase the hospital.

While the LERHSNY board reported Wednesday that it had not received any viable sale offers, members said the move to an independent board of three former LERHSNY board members improves opportunity of a sale.

The new TLC board is empowered to make financial decisions and run the hospital with its own chief executive and chief financial officers. The new board cannot, however, do some things that are “reserved powers” of LERHSNY’s board. Most notably, LERHSNY’s board must still approve sale of the hospital.

LERHSNY, which announced earlier this month that Lake Shore would close because it faces a $7 million loss for 2013, is the corporation that oversaw Lake Shore and its affiliated clinics, as well as Brooks Memorial Hospital in Dunkirk. Under this arrangement, the two systems would again operate independently.

The LERHSNY board determined Tuesday that the sale offer received thus far for the Lake Shore property was insufficient. There is also interest in Lake Shore from operators of long-term and home-health services.

“Our board members felt that given the challenges to the system, it was in the best interest of the community Lake Shore serves for it to obtain renewed independence,” said LERHSNY board chair Christopher Lanski. “This also allows Brooks to operate without the liabilities Lake Shore brought to the system.”

Prospective buyer Tony Borrello’s attorney Barry Corvert of Lipsitz Green expressed optimism for a new board.

“Legal actions are being taken to facilitate Tony purchasing Lake Shore and making it a seamless transition … it is very positive,” he said in a phone interview Thursday.

Corvert said although the LERHSNY board has the final say, he is under the understanding that the board “is willing to allow (the purchase) to happen.”

“We are very hopeful this will work out,” he added.

LERHSNY formed in 2008 as the parent organization for Brooks Memorial and TLC Health Network, until Tuesday’s vote comprised of Lake Shore in Irving and Gowanda Urgent Care & Medical Center. Tri-County Memorial Hospital in Gowanda was destroyed by flood in 2009 and financial pressures ended efforts to re-open it at a new site in Perrysburg last year.

Top regional and state Department of Health officials have been in discussions with hospital officials about all options.

“This decision allows LERHSNY to maintain the strength of Brooks during this transition, retaining the Dunkirk-Fredonia community’s faith, as well as patient and physician loyalty,” Lanski added. “By working in this positive fashion on Brooks’ operations, we want to reinforce the value of our assets and community support surrounding Brooks and Lake Shore.”

The new TLC board’s members are Timothy Cooper, Dr. James Wild and Virginia Cooper. She is not related to Timothy Cooper.