SUNY Petitions to Block Transfer of Hospital Assets
The State University of New York is asking an appellate panel to impose a rare writ of prohibition on Brooklyn Supreme Court Justice Carolyn Demarest (See Profile), to prevent the judge from transferring the assets of the financially ailing Long Island College Hospital (LICH) or establishing a trust to control the assets.
On Thursday, SUNY petitioned the Appellate Division, Second Department, for both a writ of prohibition and permission to appeal a Demarest order that SUNY says was a "gross abuse of power that went far beyond the limits of [her] jurisdiction."
In 2011, Demarest approved a petition allowing the LICH to transfer its assets to the SUNY Downstate Medical Center. Demarest issued the order on her belief that SUNY would continue to operate LICH as a full-service hospital. However, after SUNY shut down most hospital operations and Demarest personally visited the LICH and witnessed what she described as the "travesty" of ambulances being turned away, the judge last summer reversed her 2011 order (NYLJ, Aug. 22).
Demarest has suggested that the hospital's prior owner, Continuum Health Partners, could retake control of the facility or that the state Commissioner of Health could appoint a receiver.
SUNY, which said the LICH is losing $19 million a month in taxpayer money, is seeking to prevent Demarest from proceeding.
"There is simply no constitutional, statutory, common or administrative law that empowers a court to 'revoke' a 27-month-old order approving a Not-for-Profit Corporation Law…petition," SUNY said in a motion for permission to appeal.
Abrams Fensterman in Brooklyn and Hogan Lovells in Manhattan represent SUNY. Proskauer Rose represents LICH.