TLC Health Network, the operator of Lake Shore Health Care Center in Irving, N.Y., has filed for Chapter 11 bankruptcy.
Lake Erie Regional Health System of New York, the parent of TLC and Lake Shore based in Dunkirk, N.Y., made the announcement late yesterday. Officials said TLC and Lake Shore, a 220-bed hospital, lost $16.7 million from operations from 2008 through 2012. Including the first 10 months of this year, TLC and Lake Shore have lost $25.8 million.
The massive deficits have also come despite the fact Brooks Memorial Hospital, the flagship of LERHSNY in Dunkirk, loaned $3.7 million to TLC and Lake Shore this year. The system board voted in late October to approve filing for bankruptcy, and the papers were officially filed yesterday.
"Our board has done so much already, and let's be clear: Without Brooks and LERSHNY, Lake Shore would have closed months ago," Christopher Lanski, LERSHNY's board chair, said in a news release. "Now the well is dry. We cannot and will not endanger Brooks' status any further with more money for TLC/Lake Shore. It is in everyone's best interests to find a buyer, reorganize under Chapter 11 or close."
In October, Lake Shore announced it would close at the end of January 2014. The closure could come as soon as Jan. 14 if the hospital does not receive supplemental funding.
The bankruptcy filing and intent to close does not mean Lake Shore will definitively shutter its doors, although a potential solution is increasingly unlikely. As Lake Shore reorganizes debt to creditors, the hospital will continue its hunt for prospective buyers. Anthony Borrello, a local businessman, placed a bid to buy the hospital soon after it announced its plans to close, but LERHSNY said they have yet to receive a "firm bid that met the minimum requirements for the sale." Requirements include a fair purchase price, and perhaps more importantly, any buyer will have to provide interim financing until ownership is successfully transferred.
LERHSNY is also in hot water financially. Officials released figures showing the system has lost more than $10.5 million from operations in the first 10 months of 2013 on almost $65.8 million of revenue. The system expected revenue would be around $73.4 million.
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