Nonprofit board pushes to regain control of hospital
The for-profit owners of Brownsville Hospital Inc. say they have no intention of maintaining a 29-year lease with the nonprofit Brownsville Property Association, but they aren’t moving out quite as quickly as the nonprofit group would like. The for-profit group that purchased the operations of the hospital in 2005 surrendered its license to the state Department of Health and filed for Chapter 11 bankruptcy in January. Although Chapter 11 is generally used by businesses planning to reopen, hospital officials have said they have no intention of reopening what was then called Tara Hospital at Brownsville and that the Chapter 11 filing was used to give them more control over the closing procedures than is provided under a Chapter 7 liquidation bankruptcy.
The for-profit group had filed for an extension of time with the bankruptcy court to make its decision regarding the continuation of its leases. Daniel White, attorney for the nonprofit board, said his client doesn’t want the process to be dragged out longer than necessary.
“We’re attempting to get back the building quicker,” White said.
The Brownsville Property Group this week filed a motion in federal bankruptcy court in Pittsburgh asking that the eviction not be delayed because of the bankruptcy proceedings. The nonprofit board contends that the lease agreement was nullified when the for-profit group surrendered its operating license and closed the acute care facility.
“We have no intention of being there long-term,” said Lawrence Bolla, the attorney for Brownsville Hospital Inc. “We have presented to attorney White an agreement with an auctioneer, which has not yet been signed, to dispose of the personal property in an open auction. The auctioneer will need occupancy of the building for 60 days after the closing with him.”
A creditors meeting was held Wednesday in bankruptcy court.
“I asked them if it was their intent to end this lease, and they said it most certainly was, but they wanted to hold onto it until they had completed their businesses, which basically is getting rid of the personal property,” White said. “I was happy to get them to say on the record that it was their intention to reject the lease.”
Bolla said his client most likely would be out of the hospital building on Simpson Road in May or June. Under the original timetable established by the bankruptcy proceedings, the for-profit group has until late April to notify the courts as to whether it would be continuing with any lease agreements.
“I don’t think the nonprofit board will be unreasonable about this,” Bolla said.
Bolla said that at this stage the relationship between the for-profit and the nonprofit groups is similar to that of a couple going through a divorce.
“We are going to have a piece by piece inventory done. We’ll have a walk through to determine who owns what,” Bolla said.
White said the nonprofit group was shown proof that the for-profit group is maintaining all insurances on the building and is paying all the utility bills. The for-profit group’s presence in the building, however, is hindering the non-profit group’s ability to find a new tenant that may be willing to run the facility as an acute care hospital.
“It’s certainly the (nonprofit) board’s intention to have them move on as quickly as possible,” White said. “It is our intention to get someone to come in and operate that hospital as quickly as possible.”
White said the nonprofit board is hoping the for-profit corporation will be able to wrap up its business and be out of the hospital by the end of May at the latest.
“They’re getting the benefit of our property without paying for it,” White said.
White said the nonprofit board is considering the possibility of filing an administrative claim for compensation from the for-profit group for use of the property since the hospital closed in January.