By NICOLE GUGINO
OBSERVER Assistant News Editor
IRVING – Bankruptcy may sound like a bad thing for Lake Shore Hospital, but according to Barry Corvert, lawyer for local businessman Tony Borrello, this is a positive step.
Borrello submitted a bid for the hospital after it was announced Oct. 16 that the hospital would close on Jan. 31. The original bid was later rejected, but negotiations reportedly continue on the sale of the hospital.
Corvert confirmed in a phone interview Monday night that the hospital will reportedly be filing for Chapter 11 bankruptcy very soon.
“Chapter 11 bankruptcy is a well-known way to reorganize a company you want to keep in business … It gives us the opportunity to examine how best to handle the reorganization and purchase by Tony’s team,” he said.
Corvert explained the reorganization is a “good thing” and will give him and his client time to do due diligence on purchasing the hospital.
Corvert said although this process is called bankruptcy, it means the opposite of closing the hospital.
“This is not closing at all, this is a step to make sure the hospital does not close,” he added.
When asked about Borrello’s offer on the hospital, Corvert said they are looking forward to working with Lake Shore’s new board of directors and interim CEO John Galati and they are “very hopeful” for the future sale.
The Chapter 11 bankruptcy proceeding would be overseen by a federal judge. Chapter 11 differs from Chapter 7 bankruptcy in that it is for reorganization to accommodate a purchase, not dissolving assets.
Vice President for Marketing and Community Relations for Lake Erie Regional Heath System of New York Scott Butler could not be reached Monday evening. Butler would not confirm the hospital filing for bankruptcy with Buffalo media outlets but said it is on the table and will be announced to the public if the decision is made.
State Senator Catharine Young also spoke with Buffalo media outlets, saying the filing could buy more time.
Lake Shore Hospital employs 460 workers and treats patients throughout northern Chautauqua County as well as Erie and Cattaraugus counties.