May 31, 2006 By Christine Haines 3 min read

No court order has been filed finalizing an agreement that would terminate the lease of the for-profit Brownsville General Hospital Inc. and return the former hospital and four other buildings to the control of the nonprofit owner, Brownsville Property Corp. The matter was believed settled in Federal Bankruptcy Court in Pittsburgh a week ago. The nonprofit group agreed to withdraw its objections to the auction of personal property at the hospital if the for-profit group, which closed the hospital and declared bankruptcy in January, would agree to terminate its lease immediately, retaining use of the former hospital only until the persal property could be sold and removed from the former hospital building.

Attorney Kirk Burkley, representing the creditors committee, had argued last week that the best interest of the creditors was to allow the for-profit company to retain the lease for at least the next 90 days, noting that the rent from the occupied offices in three of the buildings provides substantial income to BGH Inc. that could be used to pay the creditors.

Federal Bankruptcy Judge Bruce McCullough denied that the creditors had any standing in the lease agreement.

Following a brief off-the-record discussion between Burkley and attorney Lawrence Bolla, representing BGH Inc., Bolla told the court that an agreement with the property owner could be worked out. Bolla and Vetica prepared a proposed order for McCullough to sign, but according to an emergency motion for clarification filed by Bolla Tuesday, Burkley is again objecting to the agreement to terminate the lease.

“(BPC is) interested in pursuing all activity reasonably calculated to resume the operation of an acute care facility and related operations which provide medical services to the residents of Brownsville, Pennsylvania, and, to put it mildly, are disturbed by the unwillingness and inability on the part of Counsel for the Committee to conclude the settlement on terms that in the best interest of all parties,” Vetica wrote in his emergency motion for clarification.

Vetica is asking McCullough to schedule a hearing on or before June 6, the scheduled closing for the sale of the personal property to an auction house, to clarify the issues surrounding the lease agreement. Great American, the auction house that purchased the personal property at a bankruptcy court auction last week for $435,000, is scheduled to have a closing on that sale with BGH Inc. on June 6, with a public auction of the property to take place within 60 days of the closing.

Vetica said his client does not want to interfere with the public auction, but does need to protect its legal rights as well. The nonprofit board members last week had viewed what they thought was the end of the lease agreement as the beginning of their opportunity to once again market the hospital to medical providers and slowly return the facility to community use. Don Redman, vice president of the nonprofit board had said plans called for the reopening of the laboratories, skilled nursing and psychiatric units, and possibly the creation of an urgent care center, none of which requires a hospital license from the Pennsylvania Department of Health.