TLC given permission to borrow full $1M
TLC Health Network was given permission Monday to borrow $1 million from the Dormitory Authority of New York in order to keep its doors open for a sale.
According to Adolph Iannaccone, U.S. Bankruptcy Court Chief Justice Carl L. Bucki’s law clerk, the $1 million must get Lake Shore Health Care Center through until the facility is sold or it closes its doors.
He explained the court had previously approved an interim order for the hospital to borrow $500,000 from DASNY, but this approval in principle finalizes the agreement for the total $1 million. However, he said there are still some terms to be worked out and the order was not signed Monday.
Iannaccone said TLC hopes to be able to get this signed at the next hearing on March 24.
TLC Divisional Director for Business Development Scott Butler said the hospital was satisfied with the hearing.
“We’re pleased with how the session went (Monday) and, specifically, that the motion to allow for the potential use of DASNY funds was approved. This loan option provides us with the resources needed to maintain operations at Lake Shore Health Care Center in the short-term while working to reach a sales or partnership deal that will allow us to continue providing critical health services to this community for many years to come,” Butler said.
Iannaccone said a motion to pay specific creditors was adjourned because of its connection with the Federal Emergency Management Agency.
“Some of the money that TLC can pay to creditors would get reimbursements from FEMA and would result in more money coming in to pay creditors. It sounds like a good thing but it takes six to 12 months to receive reimbursements from FEMA and because this is a lot of money, the judge decided to adjourn the motion until March 24,” he explained.
The court also approved a motion for Lake Shore to use Hodgson Russ Attorneys LLP, Brooks Memorial Hospital’s attorney, to be hired for labor matters.
Iannaccone said the motion to allow TLC to lease the Gowanda and Forestville clinics to Brooks was adorned until May 12.
TLC’s next hearing in Buffalo bankruptcy court will be March 24.
Lake Shore Hospital submitted a closure plan to the New York State Health Department last year in October and in December filed for Chapter 11 bankruptcy. No closure date has been set and hospital officials have expressed a desire to keep the facility open for a seamless sale. No offer to purchase the hospital has been accepted, or considered by the TLC board, Lake Erie Regional Health System Board or the bankruptcy court.