LICH case back to court in Brooklyn Friday: Bidder seeks injunction against SUNY

BHP's Merrell Schexnydre: 'SUNY not negotiating in good faith'

May 2, 2014 By Mary Frost Brooklyn Daily Eagle

Merrell Schexnydre

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Brooklyn Health Partners (BHP), the group negotiating with SUNY to buy Long Island College Hospital (LICH) will be in court Friday morning before state Supreme Court Justice Johnny Lee Baynes to seek an injunction against SUNY.

BHP claims SUNY is attempting to undermine contract negotiations before Monday’s deadline. The California-based group says it is ready to provide a $25 million non-refundable deposit and proof of financing for the hospital and residential development project. BHP’s bid to purchase LICH from SUNY was $250 million.

BHP’s attorneys obtained a stay late Thursday at state Supreme Court. Justice Baynes will be hearing the complaint at 9:30 a.m. BHP is represented by Kaplan Kravet & Vogel.

Merrell Schexnydre, CEO of BHP, told the Brooklyn Eagle late Thursday, “We’re trying to insure that we’ll get a full service hospital here in Brooklyn. We were afraid because the SUNY counsel sent us a letter that they may disqualify us for reasons that we don’t believe are fair. And for that reason we came and asked the judge to look at our side of the equation.”

“We’re committed to bringing a full-service, state of the art hospital to Brooklyn and we’ll do anything in our power to accomplish that,” he said.

The complaint claims that SUNY “did not negotiate with BHP in good faith” from the start.

“SUNY has repeatedly imposed one-sided and inequitable requirements and arbitrary deadlines on BHP, which BHP accepted, only to have SUNY then impose even harsher deadlines or more onerous burdens on BHP. In each instance, however, BHP has continued to act in good faith, in an effort to meet all of SUNY’s demands,” the complaint says.

The document lists a litany of what BHP calls unreasonable demands and deal-killing actions by SUNY.

In one instance, BHP says SUNY is requiring proof of not just the purchase price for LICH but the whole amount needed to construct the full-service hospital two years down the road.

BHP also complains that SUNY repeatedly failed to provide them with the paperwork needed to close the transaction, such as a draft of an interim hospital space lease, and that SUNY threatened to end negotiations if BHP sought to be designated by the state Department of Health as a Temporary Operator at LICH.

While the court agreement calls for SUNY to cooperate with the successful bidder in obtaining licensing and permits, SUNY has refused to do so, BHP says. “Without prior Article 28 approval and cooperation from SUNY in obtaining Article 28 approval, it is effectively impossible for BHP to perform under the terms of the PSA drafted by SUNY.”

On April 30 SUNY sent a letter to BHP saying they intended to terminate negotiations. BHP claims that SUNY told them it was imposing stricter than usual demands on BHP because “parties whose proposals had been rejected in favor of BHPs had voiced complaints to SUNY” and leaked rumors about BHP to the press.

BHP has been caught in a swirling maelstrom of negative press over the past week, first with allegations from a former partner and relative, Derek Oubre, head of Trindade Value Partners, and next with unsupportive comments by Mayor Bill de Blasio, who called for SUNY to drop BHP and begin negotiations with another group. Oubre has filed a complaint with SUNY and with the state Comptroller’s Office about BHP’s bid and about SUNY’s scoring process.

“I think we’ve been getting the negative press because we’ve not been able to discuss our position,” Schexnydre said. “Silence is sometimes [seen as] a passive admittance that something’s wrong. But we’ve been under a gag order, relative to the contract and contract issues, and so we chose to obey that.

“We intend to demonstrate in the near future to the Mayor that we are capable of doing what we said we would,” he said. “I can assure you we have all the money required to do the purchase of the property, construction of the bridge facility, and the construction of the hospital.”

SUNY spokesperson David Doyle, told the Brooklyn Eagle late Thursday, “SUNY has acted, and will continue to act, in good faith and in accordance with the stipulation and order throughout this process, working tirelessly to deliver the viable long-term outcome everyone wants for the Brooklyn community.”

He denied that SUNY had thrown up barriers to the deal. “We are aware of the growing concerns expressed by many stakeholders about the nature and feasibility of BHP’s plan for healthcare services. As a matter of accountability and responsibility, SUNY expects BHP to do exactly what it said it would do in its proposal. SUNY has cooperated with BHP in its plans to obtain regulatory approvals and has provided flexibility in addressing BHP’s needs with respect to timelines, schedules, and milestones.”

Brooklyn residents, who have fought for more than a year to keep LICH in operation, have watched the unraveling negotiations with growing horror. Attorney Jim Walden of Gibson, Dunn & Crutcher told the Eagle late Thursday, “The community is, rightfully, frustrated beyond belief, regardless who is at fault. This hospital is on the verge of closing. Lives will be at risk.”

On Wednesday the Eagle received word that because of hospital overcrowding across Brooklyn, a LICH patient had to give birth without pain medication at 3 a.m. at Maimonides Hospital. Her husband watched as another woman almost gave birth “in the hall on the floor.”

Updated at 11:40 p.m.