BROOKLYN, N.Y., Sept. 30 /PRNewswire/ -- The Brooklyn Hospital Center (TBHC) today announced that, in order to strengthen its financial position and its ability to serve its patients and community, it has filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code. The filings were made in the U.S. District Court for the Eastern District of New York. TBHC said it intends to use the reorganization process to address balance sheet and cash flow issues, and to further improve its operations.
Throughout the process, the hospital and the Caledonian Health Center, its network of diagnostic and treatment centers, will continue their normal operations. In conjunction with the filing, TBHC will seek approval from the Bankruptcy Court for a variety of “first day motions” enabling it to continue to manage its operations in the ordinary course. These motions include a request to continue wage and salary payments and other benefits to employees. Approval of such payments is routinely granted.
“Today’s action -- which allows us to continue operating as normal while we develop a plan to strengthen our balance sheet and financial position -- is the logical next step in building a stronger Brooklyn Hospital Center for the future,” said Samuel Lehrfeld, President and Chief Executive Officer. “Our facility already has undergone an extensive operational restructuring that addressed our key services and cost structure, while expanding and enhancing inpatient services at TBHC and ambulatory services at both the hospital and at the Caledonian Health Center sites. As a result, our underlying business today is very good and we ‘turned the corner,’ in terms of operations, in the year 2004.”
Mr. Lehrfeld added, however, that TBHC is burdened by extensive “legacy” liabilities -- including previous indebtedness and litigation, and insurance issues -- that adversely affect cash flow. “By utilizing a disciplined financial restructuring process, we are going to address current liquidity problems as well as long-term solvency issues in order to ensure The Brooklyn Hospital Center continues to serve its patients and community with the skill and passion they deserve,” he said. “We will remain focused on our commitment to our key constituencies throughout this process, and there will be no interruption in services.”
To fund its continuing operations during the restructuring, TBHC has secured a commitment from the Dormitory Authority of the State of New York (DASNY) for $6 million in debtor-in-possession (DIP) financing. Subject to court approval, the DIP credit facility will be used to supplement TBHC’s cash from operations during the reorganization process. Additionally, TBHC said it is arranging a working capital/DIP financing of approximately $20 million from a commercial lender.
About The Brooklyn Hospital Center
Established in 1845 as the borough’s first hospital, The Brooklyn Hospital Center provides a variety of inpatient and outpatient services and education programs to improve the well being of its community. A member of the New York-Presbyterian Healthcare System and affiliated with Weill Medical College of Cornell University, the hospital and its Caledonian Health Center sites serve more than 500,000 people annually. To learn more, please visit http://www.tbh.org.
The Brooklyn Hospital Center
CONTACT: Michael Geczi of The Torrenzano Group, office: +1-212-681-1700,ext. 156, or cell: +1-917-439-8377, for The Brooklyn Hospital Center
Web site: http://www.tbh.org/
