TLC’s FEMA funding discussed in bankruptcy hearing

Two items in TLC Health Network’s recent bankruptcy hearing revolved around Federal Emergency Management Agency funding.

According to U.S. Bankruptcy Court Chief Justice Carl L. Bucki’s Law Clerk Adolph Iannaccone, TLC, which operates Lake Shore Health Center and several clinics, received FEMA grants, which allowed it to not need to borrow further from the Dormitory Authority of New York state.

In March, TLC was given permission to borrow up to $1 million from DASNY in order to keep the hospital open for a sale of the facility.

Iannaccone said the motion for TLC to borrow the money from DASNY was scheduled for April 28.

The court in Buffalo also allowed TLC to pay debts that will be reimbursed by FEMA.

“The debtor was given permission to pay off contractors that held prepetition debts, or before bankruptcy filing, which would normally be paid later. These were from repairs on the emergency room and if the debtor paid the contractors it would be reimbursed 87 percent by FEMA,” he explained.

“The total was $273,000 – $230,000 were made into contractor liens, which would have been paid if the facility was sold – but with the reimbursement, it made sense.”

This motion was adjourned twice in March because of the question on how long it would take to receive the FEMA reimbursement.

The next hearing is scheduled for April 28.

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.

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