Court approves hospital accord
The U.S. Bankruptcy Court in Pittsburgh has approved the liquidation plan for Brownsville General Hospital Inc., but the distribution of funds still could be months or even years away. The for-profit hospital declared bankruptcy Jan. 24, 2006, just nine months after Fayette County Orphans Court approved the sale of the former nonprofit community hospital to a private, for-profit corporation headed by businessman Gary Gosai.
Robert Bernstein of the Bernstein Law Firm in Pittsburgh was appointed as the bankruptcy plan administrator, despite attempts to block his appointment by John Vetica, the attorney representing the for-profit hospital’s former landlord, the Brownsville Property Corp.
Bernstein said that before any funds can be distributed, he needs to complete the liquidation of the assets of the former hospital, including several pieces of equipment and one office building.
“There is a piece of real estate that has to be sold,” Bernstein said.
The Fayette County Assessment Office lists a 1,477-square-foot office condominium at 125 Simpson Road as belonging to Brownsville General Hospital Inc. It is valued at $82,100 on the county records.
Bernstein said he also needs to look into the accounts receivable of more than $1 million that could be used to pay the hospital’s debtors. Bernstein said the bankrupt company currently has about $900,000 on hand, which is not enough to cover even the amount owed to former employees of the hospital who are scheduled to be paid first in the distribution.
Bernstein said there also are ongoing expenses to be paid related to the liquidation and possible litigation that could result in additional funds to be distributed to creditors.
“I don’t want to spend all the money on hand and then not have enough to pursue other assets,” Bernstein said. “It’s going to be at least a couple of months before I figure all this out.”
Bernstein said it was unlikely that there would be even a partial distribution of the assets within the next six months.
Bernstein said that as the plan administrator, he will be looking into ways of recovering as much money as possible for the creditors, including possibly filing suit against the former for-profit owners.
“We’re looking at everything. That’s something we would normally look at to see if they did anything that makes them liable,” Bernstein said.
Bernstein said he also is looking into allegations that payments that could be construed as improper under bankruptcy law, though not necessarily illegal, were made to any companies in the three months prior to the bankruptcy that would have given some creditors preferential treatment over others.