Schumer Brokers Compromise Ensuring Sheehan Hospital Will Emerge From Bankruptcy

Schumer Brokers Compromise Ensuring Sheehan Hospital Will Emerge From Bankruptcy

U.S. Senator Charles E. Schumer today announced that an agreement has been reached for a settlement plan that will allow Sheehan Memorial Hospital to emerge from bankruptcy and continue to serve the community. Schumer worked with the Internal Revenue Service (IRS) and U.S. Department of Justice (DOJ) to broker a compromise. The hospital has been working with the IRS to resolve issues over tax debts and penalties that have carried over from a prior period of mismanagement.

"Sheehan Memorial Hospital's recovery is a success story, and now a workable deal has been reached that will allow them to stay afloat," Schumer said. "Sheehan provides irreplaceable services for a vulnerable population. The hospital has been in the center of the revitalization efforts in the community and has served the inner-city of Buffalo for many years. In the last eighteen months they have bounced back from difficult financial times. I was honored to help save this hospital, and I am glad there is a fair and reasonable resolution."

Sheila K. Kee, President and CEO, said, "On behalf of Sheehan Memorial Hospital, its 150 employees, its management team and its Board of Directors, I wish to extend to U.S. Senator Chuck Schumer our sincere gratitude and deepest appreciation for the extraordinary support and assistance he and his staff have provided to Sheehan. Senator Schumer was there to provide assistance when Sheehan needed him the very most. The Schumer team is absolutely the best. The Senator and his staff should take great pride in the high level of constituent services they provide, their responsiveness and the great care and attention they provided to promoting Sheehan Memorial as a vital community asset. Sheehan Memorial Hospital has a promising and vibrant future. Senator Schumer and his team should take great pride in their role to save Sheehan and to ensure that the hospital continues to provide essential healthcare services to community residents."

Sheehan Memorial Hospital is a community-based, not-or-profit hospital, located on Buffalo's East Side. It provides care for parts of the community that often lack medical services and have high risk factors for disease and injury. If Sheehan Memorial Hospital was forced to close, tens of thousand of Buffalo residents would have no comparable alternative for healthcare. In the past year, the center has been recognized by the Community Foundation for Greater Buffalo and the Susan G. Komen Foundation for the role it plays in improving the health status of inner-city residents.

Since declaring bankruptcy, the hospital has balanced its budget, promptly paid bills, and complied with the terms of their bankruptcy petition. New hospital management reports that operations have dramatically improved, annual spending has been cut by more than half since 2002, and cost-containment measures have allowed for significant savings.

Millions of dollars have been spend to revitalize the community surrounding Sheehan and throughout this transformation, Sheehan Memorial's facility has served as the anchor of the neighborhood's revitalization. The closure of Sheehan could have resulted in an abandoned building, leading to urban decay and neglect, which would seriously erode the significant investments the federal government has made in the area.

The U.S. Bankruptcy Court of the Western District of New York has approved Sheehan Memorial Hospital's Chapter 11 Plan of Reorganization. Sheehan filed its Chapter 11 petition with the U.S. Bankruptcy Court on March 8, 2004. A major challenge to Sheehan's emergence from Chapter 11 involved the resolution of IRS debt, which had been incurred by former hospital administrations.

Schumer was in constant contact with the IRS, DOJ and Sheehan throughout this process to ensure the citizens of Buffalo could continue to count on the services provided by the hospital. In June, Schumer wrote to IRS Commissioner Mark Everson, urging that he assist in resolving issues with the hospital. In October, Schumer wrote to Pat Mullarkey, Section Chief, Civil Trial Section, Northern Region of DOJ asking that he help resolve this issue in a way that would allow Sheehan to remain open.

http://schumer.senate.gov/SchumerWebsite/pressroom/record.cfm?id=266134&&year=2006&