Apr 29, 2009 3 min read

The nonprofit group that owns the real estate and buildings at the former Brownsville General Hospital has until November to come up with $2 million to settle a suit in Federal bankruptcy court. The Brownsville Property Corp. late last year agreed to pay $2 million to repay loans that were made in 1997 to the property corporation by the hospital and included as part of the accounts receivable of the former hospital, which declared bankruptcy in 2006. Under the agreement, the property corporation has until Nov. 12, 2009 to make the payment, or it defaults to $6 million. In February, attorneys for the closed hospital filed a default motion in federal court seeking immediate payment of the $6 million because shortly before the mortgage to Brownsville General Hospital was recorded, the property corporation entered into an agreement with Presidential Healthcare Credit Corp. using the real estate as collateral.

Presidential in late March withdrew its mortgage on the property, leading the plan administrator to withdraw the default motion last week. “That’s really good news,” said Frank Ricco, chairman of the Brownsville Property Corp. “I’m pretty sure we can get the $2 million.”

Ricco said the building has been appraised at $4.6 million as a vacant structure, though when the hospital occupied the building, it was assessed at $12 million and is insured for $12 million. “With all the improvements that have been made, it should be back up to the $12 million,” he said.

The hospital, which is currently closed, had been operated by three different business entities in the past four years. It operated as a nonprofit community facility under the name of Brownsville General Hospital until March 2005, when Fayette County Orphans Court approved the sale of the business to a for-profit group. That group ran the hospital as Brownsville General Hospital Inc. until January 2006, when the facility was closed and the group declared bankruptcy. A new nonprofit group reopened the hospital in May 2008 as Brownsville Tri-County Hospital, but closed and declared bankruptcy in February 2009.

Attorney Lawrence Bolla, who represents the bankruptcy plan administrator for Brownsville General Hospital Inc. said that if the property corporation does not come up with the funds to satisfy the credit obligation, more drastic actions could be taken.

“The only way to satisfy that would be to sheriff’s sale the place,” Bolla said.

Ricco noted that Parkvale Bank holds the first mortgage on the property for more than $1 million, which would have to be paid before any money from the sale of the land went to the bankruptcy court proceedings. Ricco said there are no plans at this time to sell the real estate. “We haven’t had anyone come say to me that they want to buy the building,” Ricco said.

Ricco said he still has hopes of reopening the facility as a medical facility of some sort, so it is again serving the community.

“Hopefully we’ll get someone to come in and take it over,” Ricco said. “I have two meetings this week. I hope to get some positive feedback.”