IRVING – With hopes of saving Lake Shore Hospital from closure, TLC Health Network filed for bankruptcy Monday.
The TLC Board of Directors announced in a press release that it filed Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the Western District of New York as the next step toward restructuring operations.
“We believe this is a necessary step toward our ultimate goal of maintaining viable health services within this community,” TLC Board Member Tim Cooper stated. “Filing for Chapter 11 should allow us to climb out from under our debt and emerge stronger and more financially stable.”
Chapter 11 would allow TLC to propose a reorganization plan that would enable it to address debt issues while seeking new sources of income and sustainability. It was previously reported on Dec. 2 that the hospital was considering filing for Chapter 11 bankruptcy as an option.
“This action is an opportunity to reorganize ourselves for future success,” Scott Butler, divisional director of business development for TLC Health Network, said. “Everyone is still working very hard to try to avoid a complete closure, and this move might actually make TLC more attractive for potential partners who may be willing to allow us to continue providing critical health services to the community.”
Barry Corvert, the lawyer representing potential buyer Tony Borrello, said after the previous announcement that filing for Chapter 11 bankruptcy would give his client time to prepare for the best way to purchase the hospital.
State Senator Catharine Young also said she was in favor of the action because it provides a way for the hospital to continue to provide critical care to the community.
“We would like to be able to save as many services as we can. The hospital’s closure would be a devastating blow to the community in terms of medical care, but also a huge economic loss. I think if there is a way to turn this around we should take every opportunity to do so,” she said.
Silver Creek Mayor Nick Piccolo said he also sees the filing as a positive step.
“Chapter 11 bankruptcy is not as bad as some people make it out to be,” he said. “It is basically reorganizing and it lets them consider the value and worth of the business and it is a way to keep the hospital active either through TLC or a sale.”
Piccolo added he hopes this is good news for the village and the town of Hanover, whose residents stand to lose another local employer and be a detriment to health and the economic climate.
TLC Health Network joins a growing list of hospitals across the country that have filed for bankruptcy in the last few years. Fortunately, for the health system, history has shown that businesses can emerge successfully from Chapter 11 to become productive and profitable. In fact, Western New York has seen its share of such stories in recent years with business ranging from hospitals to professional sports teams to large manufacturers.
“I know that there is still a great deal of concern about our future,” Cooper stated. “And it has been a difficult time for our employees, volunteers, medical staff, and patients/clients. So, we greatly appreciate the outpouring of support that we have received from so many during this difficult time. However, the important thing to remember is, as of this moment, we are still open for business and dedicated to providing outstanding service to everyone who continues to trust their health care to us.”
Chapter 11 bankruptcy is a process intended for reorganizing a business to make it profitable and involves negotiating with creditors on outstanding debts. This differs from Chapter 7 bankruptcy which involves liquidating assets.
On Oct. 16 it was announced Lake Shore Hospital will close in January. The hospital provides emergency and other health services to the northern Chautauqua County community as well as Cattaraugus and southern Erie counties and also employs 460 workers.
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