LICH bidder blows $25 million deadline

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LICH. (Peter Lettre)
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Dan Goldberg

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Brooklyn Health Partners, the embattled company negotiating with SUNY to purchase Long Island College Hospital, did not provide a $25 million check on Thursday, defying an order from a Brooklyn Supreme Court judge. 

Instead, the company told Justice Johnny Lee Baynes that it would provide a bond in the morning, according to a letter sent to the clerk and obtained by Capital. 

Baynes' clerk sent back a curt reply saying, "The Judge expects the language of his order to be adhered to specifically."

It was not, despite the fact that Baynes made it explicit that B.H.P.'s viability hinged on whether the company could deliver that check.

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A B.H.P. spokeswoman did not respond to repeated requests for comment. 

The 3 p.m. deadline was the latest last chance for B.H.P., whose bid to take over the money-losing hospital was disqualified by SUNY on Monday, after state officials said the company lacked the financial and medical wherewithal to deliver on its ambitious proposal to build a 300- to 400-bed hospital and 1,000 housing units.

B.H.P. was in court requesting that their disqualification be overturned, arguing that SUNY was acting in bad faith.

Baynes said he would be “gracious” and give the company another chance to prove its seriousness.

“Lots of people can talk the talk,” he said. “Let's see if they can walk the walk.”

He ordered B.H.P., whose bid scored highest among nine proposals, deposit a $25 million check with the court, which the judge said he could declare forfeited if he determines B.H.P. was misrepresenting its capabilities.

Baynes said he might use that money to compensate union workers who would be laid off if LICH closes before a new operator has been found.

The judge also ruled that SUNY is allowed to continue negotiating with second-place scorer, The Peebles Corporation, for the sale of LICH, which means there are--for now--two companies that have a legal claim to negotiate with SUNY for a piece of state-owned property worth hundreds of millions of dollars.

Thursday's odd court proceedings were just the latest episode in the increasingly strange story surrounding the beleaguered hospital.

Attorneys for B.H.P. told Baynes that the company had met all the demands set out by the R.F.P. and that SUNY had no basis for the disqualification.

SUNY attorneys, along with attorneys representing the state health department, 1199 SEIU and NYSNA, said B.H.P. had never demonstrated their ability to run a licensed full-service hospital as they proposed.

The health care unions argued that B.H.P. won't be licensed on May 22 when SUNY can exit operations. The company will not be ready to operate a  bridge facility, much less one that has at least 100 beds as they put in their proposal.

“We are not blind,” said Richard Seltzer, representing NYSNA. “Hopes and dreams will not suffice.”

B.H.P. contended that they have an arrangement with Joseph Addabbo Family Health Centers, a federally qualified health center, to provide services on site when SUNY leaves. The company also said it is ready to sign a contract with physicians at LICH so that they can keep working.

An attorney representing the state health department pointed out that doctors and an FQHC do not constitute a hospital.

“Addabbo can be a clinic,” said Emily Reisbaum. “They are not authorized to run a hospital.”

Reisbaum also poured cold water on the idea of the health department providing a temporary operating license, saying the state law is very restrictive regarding what types of operators can obtain that kind of approval.

Baynes made clear he didn't like what he was hearing from B.H.P. attorneys, chastising them for coming to him in the eleventh hour, though last week he told the same attorneys they were in court prematurely, and intimated that their plans for operating the hospital after SUNY left were insufficient.

Still, Baynes said they could provide a deposit and had until Tuesday to show a letter of credit worth $225 million, which represents the balance of their offer, and explain what kind of medical services they will offer on May 22 and how they will address licensing issues.

The court will also hear a motion on Tuesday from Jim Walden, the attorney representing community groups.

Walden was not representing any of the parties on Thursday but he still stole the show, speaking longer than any other single attorney and arguing why B.H.P. should be given more time.

But Walden's primary concern was that he be able to make his case that certain scorers, the ones who gave non-hospital proposals high scores, be disqualified.

Though the issue was not technically in front of the court, it was argued nonetheless, while B.H.P. attorneys sat silently as spectators.

Walden told the court that the scoring sheets showed some evaluators seemed to have ignored even the loose guidelines they were given, arbitrarily awarding points to proposals in a manner that contravened the court's guidelines, which required awarding higher scores to proposals that offered a full-service hospital.

“We will negotiate in good faith with Peebles until our motion is heard to throw out defective scores, which would place Prime Healthcare, and its proposal for a full-service hospital, in the pole position,” Walden said after the court hearing.