close

Corporation asked to turn over $1.8 million to Brownsville General Hospital Inc.

By Christine Haines 3 min read

Two nonprofit corporations affiliated with the former community-owned Brownsville General Hospital are being asked to turn over more than $1.8 million to the for-profit Brownsville General Hospital Inc. that took over operations of the hospital in March 2005. According to the complaints filed in federal bankruptcy court, Brownsville General Hospital Inc. loaned money to West Point Health Corp. and Brownsville Health Services Corp. in 1997. The complaint states that no payments have been made on the loans since Oct. 15, 2004, and that the entire balance of the loans, plus interest and the cost of the suit, now is due in full.

Brownsville General Hospital Inc. declared bankruptcy Jan. 24, 2006. Lawrence Bolla, the attorney for the for-profit entity, contends in the complaints that the loans are part of the for-profit entity’s estate. Bolla could not be reached for comment Friday.

Attorneys Ernest DeHaas and John Vetica declined comment on the complaints, saying they had not yet discussed them with their client. Brownsville Property Corp. Inc., West Point Health Corporation and Brownsville Health Services have been listed collectively in previous bankruptcy court filings as the landlord of the for-profit entity.

Don Redman, who serves on the board of the Brownsville Property Corp. Inc., questioned how the for-profit entity could claim it loaned money to the nonprofit real estate entities.

“They didn’t even exist in 1997,” Redman said.

According to the state Department of State’s Corporations Bureau, the for-profit entity, Tara Hospital at Brownsville, owned by Brownsville General Hospital Inc., was formed in March 2005. There is no listing in the Corporations Bureau online files for the creation date of Brownsville General Hospital Inc.

There are no Uniform Commercial Code filings with the Department of State listing West Point Health Corp. or Brownsville Health Services as debtors or Brownsville General Hospital Inc. as a lender.

“It is clearly an unsecured debt,” Bolla said. “Under the purchase and lease agreement, we also purchased all of these claims.”

Bolla said it was apparently common practice for the income-generating, nonprofit hospital to loan money to the nonprofit property corporations. The nonprofit property corporations own the hospital building, two medical office buildings on the hospital campus and a vacant medical office on New Salem Road.

The for-profit group also is seeking nearly $500,000 for improvements made to the hospital building. The nonprofit property owner contends that lease agreement does not require it to pay for those improvements because some were made without its approval and because the for-profit group broke its lease by closing the hospital.

CUSTOMER LOGIN

If you have an account and are registered for online access, sign in with your email address and password below.

NEW CUSTOMERS/UNREGISTERED ACCOUNTS

Never been a subscriber and want to subscribe, click the Subscribe button below.

Starting at $4.79/week.

Subscribe Today