TLC takes big step toward selling Lake Shore Hospital
BUFFALO – Soon it will be known if there are serious bidders for Lake Shore Hospital.
The hospital’s parent company, TLC Health Network, had a bankruptcy hearing in Buffalo Monday with Chief Judge Carl L. Bucki.
TLC moved forward with a schedule to sell the hospital by setting an auction date, according to Judge Bucki’s Law Clerk Adolph Iannaccone.
“They can’t kick the tire down the road anymore, (bidders) are going to have to say if they are interested,” he said.
The auction for the hospital’s assets was set for July 18 with bids and a 10 percent down payment due on July 11.
Iannaccone explained TLC is hoping for a bidder to make a serious offer on all or most of its operations. He said it was reported TLC’s broker, the Hill Group, has found several interested parties on pieces of the operations.
Iannaccone reported TLC’s Attorney Jeff Dove said no progress has been made on the soft offer submitted last month for a majority of the hospital’s operations.
In order for a sale to be approved it must pass through the Bankruptcy Court as well as TLC’s and Lake Erie Regional Health System of New York’s (LERHSNY) boards.
Iannaccone said the hospital may also face a challenge in getting the Health Department to transfer a license to operate it to another company, saying he has seen this take over a year in another case.
The court postponed action on the use of $1 million in Dormitory Authority of the State of New York (DASNY) funding until June 23. Iannaccone said TLC may be looking at the money as a bridge loan during the license transfer, although it is hoped this will not be a problem.
The court also granted the creditor’s committee an extension to look over loan documents and investigate the contract between Brooks and the University of Pittsburgh Medical Center (UPMC). The committee previously asked for the extension from UPMC, which was denied before it was taken to the judge.
In addition, Iannaccone said the use of cash collateral from Brooks Memorial Hospital may be discussed at the next hearing.
“Cash collateral means a debtor can use cash from receivables and they don’t have to put it in the bank; they can use it for operations. … It is like buying a car (with a loan); the car is in your name, but the bank owns it until you pay it off,” he said, where the car is the receivables in the analogy.
The cash collateral agreement with Brooks expires on June 16.