In a move that had been anticipated since this spring, the operators of Buffalo Sheehan Health Network - the mothballed Sheehan Memorial Hospital on the city's East Side - have officially filed for Chapter 11 protection under the U.S. Bankruptcy Code.
The 100-page petition, filed with U.S. Western District Bankruptcy Court Chief Judge Carl Bucki, showed that Sheehan had assets of $6.3 million and liabilities of $5.45 million. The bulk of the assets includes the eight acres on Michigan Avenue where the 270,000-square-foot hospital sits. The property is listed as having a $3 million book value.
Also listed as an asset is $3.3 million in equipment and furnishings.
The hospital has $3.17 million in outstanding accounts receivables, according to the filing, prepared by Garry Graber, a partner at Hodgson Russ.
But hindering the hospital are the liabilities including $485,099 in a secured claim by General Electric Capital Corp., $845,727 in four separate claims by the Internal Revenue Service, and $126,654 to National Grid.
New York state is also owed $1.914 million in Medicaid overpayments made to the hospital.
Unsecured creditors include $93,531 owed the state Department of Labor for unemployment insurance.
"The filing is the start of a process where we can hopefully clear the liens," Graber said.
If that happens, it will make it easier to sell the property - which has already attracted the eye of at least one potential, unnamed interested party.
"The main purpose of this is help us sell the property," Graber said.
While the filing was made late on Aug. 24, Bucki is expected to set a hearing date on the action in the next few days.
Sheehan's board of directors, in late March, announced plans to close the hospital.
The hospital's financial state "was not sustainable for the long term future," the directors said.
Sheehan closed in June, putting 150 people out of work. The hospital's roots in Buffalo date to 1888.