Rejected LICH bidder to sue SUNY on Tuesday in Brooklyn

BHP: ''SUNY was not negotiating in good faith'

May 6, 2014 By Mary Frost Brooklyn Daily Eagle

BHP's Merrell Schexnydre, by Mary Frost

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The development team whose bid to buy Brooklyn’s Long Island College Hospital (LICH) was rejected by SUNY said they are going to court on Tuesday to stop SUNY from starting negotiations with the second-place bidder.

On Monday, SUNY turned down Brooklyn Health Partners Development Group (BHP)’s $250 million full-service hospital proposal. “Following good faith negotiations over the last thirty days, The State University of New York is unable to execute a satisfactory contract agreement with Brooklyn Health Partners,” SUNY spokesperson David Doyle said in a statement.

Peebles Corp., who came in second in a controversial bidding process, is offering a “free-standing emergency department” and ambulatory care, but no hospital.

SUNY has already invited Peebles’ attorneys to meet with them on Tuesday afternoon.

SUNY’s rejection of BHP’s bid is “a clear act of desperation,” said Borough Park investor Chaim (Harry) Miller, a partner with Merrell Schexnydre, CEO of BHP. “They didn’t expect BHP would have this type of money,” he added.

Schexnydre had no comment on Monday, but BHP spokesperson Donnette Dunbar confirmed that the group was headed to court on Tuesday.

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UPDATE: LICH tumult deepens as SUNY moves on to second bidder

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On Monday BHP’s attorneys delivered cashier checks adding up to $25 million to state Supreme Court Justice Johnny Lee Baynes, along with documents proving BHP had obtained the required financial commitments and contracts with various health care entities for interim services.

Mr. Miller said the group’s attorneys had delivered the documents before the deadline on Monday despite receiving the revised purchase and sales agreement (PSA) from SUNY late on Saturday.

Moses Reser of Atlantic Partners, LLC, a colleague of Mr. Miller, said attorneys were set to file an emergency temporary restraining order and an injunction Monday night before midnight “to stop SUNY from selling to another bidder.”

“SUNY was not negotiating in good faith,” said Mr. Reser. “The judge [state Supreme Court Justice Johnny Lee Baynes] ruled we provide the deposit money and we did today before five o’clock. We provided everything — $25 million, the letters of credit, term sheets, everything.”

Mr. Miller said he expected BHP would get a fair shake in court before Justice Baynes, who has been overseeing the convoluted case for more than a year. “He’s a very fair and reasonable judge,” he said.

Advocates for LICH, who have been fighting the state for more than a year to keep the 156-year-old community hospital open, were holding ad hoc discussions Monday night about the hospital’s impending closure. “I’m just sick about it,” said one long-time LICH patient.

Attorney Jim Walden, of Gibson, Dunn & Crutcher, told the Eagle late Monday, “This situation is obviously serious for the community, and particularly for medically vulnerable patients who depend on LICH for life-saving services. The community-group petitioners and Concerned Physicians of LICH, who we now represent, are carefully weighing options, as they should given the grave circumstances.”

Both the state and New York City Mayor Bill de Blasio came out against BHP last week. On Friday in state Supreme Court, SUNY claimed that BHP was unable to fulfill the promises made in their proposal, including providing temporary “bridge” health services after SUNY walks away from the hospital on May 22.

SUNY also said that the group couldn’t provide documentation proving they have access to $600 million worth of financing — documentation BHP says they provided on Monday.

The New York State Nurses Association, in a rare departure, agreed with SUNY, citing a letter BHP had written giving a fuzzy description of their proposed interim health care services.

On Friday, however, lawyers for BHP said they had firmed up their interim plans. According to documents obtained by the Eagle, on Monday BHP submitted signed letters of commitment from the Joseph P. Addabbo Family Health Center, Garner Health and QHR Intensive Resources (Quorum) to operate a bridge facility at LICH.

Another legal action was lodged against SUNY last week by former LICH ombudsman Dr. Jon Berall, who filed an order to show cause. Dr. Berall told the Eagle he had started the lawsuit because “We need a new RFP. This is clearly bogus, manipulated, disenfranchises the community and is disrespectful to the court.”

Contrary to the intent of the reissued RFP, “The second place finisher is a Condo King, as is the third place finisher: The hospital will be destroyed and super-lux condos built,” he said.