Long Beach (N.Y.) Medical Center filed for Chapter 11 bankruptcy protection on Wednesday with a package deal to sell its assets to South Nassau Communities Hospital for $21 million. Battered by Superstorm Sandy, the hospital had invested millions of dollars on repairs but never reopened as a full-service hospital since it was damaged in October 2012.
The hospital reported $21 million in assets and liabilities of $48 million as of Dec. 31. Revenue for the 12 months prior to Sandy were $55 million, with expenses of $59 million. Its operating loss was $4.8 million during the period—a testimony to the hospital's red ink before the Atlantic Ocean flooded poured in.
A day prior to the filing, Long Beach signed a purchase agreement with South Nassau to acquire all the real estate and operating assets of both the hospital and its affiliated nursing home, the 200-bed Komanoff Center, at their appraised value. The bankrupt hospital also borrowed $1.5 million from South Nassau because of a cash crunch in the weeks before it filed for Chapter 11.
South Nassau will continue to operate Komanoff, which has about 100 residents. The two hospitals will continue to pursue funding from FEMA to restore Long Beach's facilities, but what will happen to the campus under discussion. Its fate depends in part on whether FEMA money will cover rebuilding of the facility, according to the filing. The federal agency has already given the hospital $17.6 million.
Long Beach's trustees and management tried to reopen the hospital after it was ravaged by the storm. They tried unsuccessfully to convince the state Department of Health that it should remain an acute-care facility. State officials instead told the hospital to launch merger talks with South Nassau. More recently, DOH gave South Nassau a $6.6 million grant to pay for staff, clinical services, equipment, supplies and other expenses associated with the creation and operation of an urgent-care facility at Long Beach's campus.
Long Beach and its nursing home have about 285 employees. About 85 of them work at the hospital, which had 700 employees before Sandy struck.Long Beach Medical Center files for bankruptcy originally appeared on the website of Crain's New York Business.