Bankruptcy court OKs loan
BUFFALO – The U.S. Bankruptcy Court in Buffalo decided Wednesday to allow Lake Shore Hospital to take a loan to hold it over until Feb. 3.
According to Adolph Iannacone, Chief Judge Carl L. Bucki’s law clerk, no action was taken on the $1 million emergency loan from the Dormitory Authority of the state of New York, a division of the state Department of Health, which was secured by state Sen. Catharine Young.
“The parties are still negotiating,” he said in a phone interview Wednesday after the hearing. “The judge approved TLC to borrow some more (funds) from Brooks Memorial. That should be enough for them to continue operations until Feb. 3 when the next hearing has been scheduled.”
Iannacone explained the funds approved were the remainder of a $1 million loan Lake Shore had previously taken out from Brooks Memorial Hospital in Dunkirk, but had not spent about $331,000.
“Between now and then they hope to have the loan with the Dormitory Authority sorted out,” he added.
He said at the Feb. 3 hearing, it is expected the terms of the loan will be discussed.
The bankruptcy court also took action on Jan. 13 that allowed Lake Shore Hospital to remain open by using cash from receivables to fund ongoing operations.
LERHSNY announced the possible closure of the hospital in October due to an estimated deficit of $9 million in 2013. At the time, the closure date was tentatively set for Jan. 31. Neither this date nor any other has reportedly been approved by the state Health Department. The announcement of $1 million in emergency funds came from Young at the rally to save the hospital on Jan. 11.