Cobble Hill

SUNY Downstate must return LICH assets, Brooklyn judge rules

Cites SUNY’s `sinister purpose'

August 20, 2013 By Charisma L. Miller, Esq. Brooklyn Daily Eagle
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Brooklyn Supreme Court Justice Carolyn Demarest found that the State University of New York Downstate (SUNY Downstate) violated a contractual obligation in the asset transfer of Long Island College Hospital (LICH) property and has ordered that LICH assets be transferred back to the hospital.

As previously reported in the Brooklyn Daily Eagle, in May 2011, LICH requested and was granted the opportunity to transfer some of its assets to SUNY. The order was granted under the express declaration that “SUNY Downstate will continue [LICH’s] operation as a hospital.”

(More on this story here.)

SUNY has since then made clear its intent to close LICH and cease its existence as a functioning hospital, in direct contradiction to its 2011 declaration. In June 2013, Demarest ordered SUNY to provide an accounting of the property transfer and related monies in an attempt to ensure that the parameters of the 2011 order were being followed.

SUNY submitted the court requested documents on Aug. 5, 2013.

SUNY’s recent assertion that it must close LICH because of financial reasons — specifically that it is losing a significant amount of money by keeping LICH open as a functioning hospital and ER — did not persuade Demarest. In 2011, SUNY Downstate was “well aware of the deficit operating condition of LICH” at the time of the asset transfer, Demarest noted.

SUNY’s reason for the transfer of assets was so that the monies gained would allow SUNY to “minimize its costs and absorb the additional losses resulting from the operation of LICH” and therefore “avoid inevitable bankruptcy,” said Demarest.

After reviewing the records and documents in the case, Demarest no longer believed that the asset transfer was done to save LICH from financial decline. Instead, she concluded that the transfer had a “more sinister purpose to seize [LICH’s] assets and dismantle the hospital.”

Demarest lambasted SUNY Downstate in her ruling, declaring that there had been no “consideration provided by SUNY to LICH or the people of Brooklyn served by LICH,” in its decision to shut down the hospital.   She took the time to discuss the importance of LICH to the Brooklyn community, noting that “in addition to the approximately half million residents of the area served by LICH, virtually every citizen of Brooklyn and many others who are not citizens or residents of Brooklyn, who come into the downtown municipal center daily to work or litigate disputes or serve on juries, are served primarily by LICH in the event of a medical emergency.”

Believing it her “legal and moral responsibility” to correct an “error”, Demarest, without petition from LICH or any of its supporters, vacated the 2011 order granting asset transfer to SUNY and ordered that Continuum Health Partners Inc (Continuum), the “sole member of LICH” and former operator, take possession of the physical assets of LICH.

If, for whatever reason, Continuum is not deemed qualified, Demarest requested that a caretaker or receiver be appointed to takeover the responsibilities of LICH’s hospital administrator.

Demarest recognized that the “health care system, not only in Brooklyn, but throughout this city and this country, is in crisis,” and cited hope that a feasible plan can be devised” to sustain LICH.

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