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Creditors put New York hospital into Ch. 11

by Jamie Mason  |  Published August 18, 2011 at 11:07 AM
Peninsula Hospital Center has been put into bankruptcy protection involuntarily by a group of creditors who hope to put forward a reorganization plan for the hospital.

The Far Rockaway, N.Y.-based facility was placed into Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of New York in Brooklyn on Tuesday by a group of creditors owed a total of $127,204.

Creditors Total MedBiz of New York ($78,709), Advanced Seamless Gutters of New York ($48,000) and Wayne S. Dodakian of New Britain, Conn. ($495) filed the involuntary case.

The debtor has 21 days to respond to the petition.

Peninsula Hospital Center operates a 173-bed acute-care community teaching hospital campus encompassing a 200-bed long-term care and rehabilitation center, its website said.

The hospital provides acute, rehabilitative, outpatient, diagnostic, primary care and wellness to the communities of the Rockaways, the Five Towns of Nassau County (Woodmere, Cedarhurst, Inwood, Hewlett and Lawrence) and parts of Queens and Brooklyn, its website said.

According to counsel to the involuntary petitioners, John Macron at Macron & Cowhey PC, the petitioners, who are all unsecured creditors, believe that the hospital can be saved through a reorganization, which would pay off its debts and provide some recovery to unsecured creditors.

The petitioners want to propose the reorganization plan, but don't know at this point if the hospital would need new financing or would need to be sold through the plan, Macon said.

According to Macon, the petitioners have been approached by several other creditors who would want to join in to propose the plan.

While there have been rumors surrounding the closure of the hospital, the facility isn't scheduled to close at this time, Macon said.

A hospital spokesman refused to comment on the involuntary filing, but said that the facility hasn't made any decisions on whether or not it will close.

Judge Elizabeth S. Stong has been assigned to the case.

The hospital's parent, not-for-profit Medisys Health Network, will no longer support the hospital as of Aug. 22.

A spokesman for Medisys Health Network didn't return calls Wednesday. A spokesman for the New York State Department of Health also did not return calls.
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