Operations at Hospital and Caledonian Health Center Sites
Not to Be Interrupted
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.
SOURCE The Brooklyn Hospital Center
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Related links:
http://www.tbh.org
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
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