Less than a month after reaching a dead end in talks with Westchester Medical Center, Sound Shore Health System in New Rochelle will be acquired by Bronx-based Montefiore Medical Center in a voluntary bankruptcy proceeding.
Officials at the two hospital centers said Montefiore has agreed to buy Sound Shore”™s assets and assume certain liabilities. Sound Shore has filed Chapter 11 petitions seeking protection from creditors in U.S. Bankruptcy Court in White Plains.
A purchase price was not disclosed. Sound Shore Health System President and CEO John Spicer in a radio interview said Montefiore will invest more than $60 million in Sound Shore”™s restructuring and has committed “a significant amount of resources” to upgrade facilities in New Rochelle and Mount Vernon.
The Sound Shore system, which includes Sound Shore Medical Center and Schaffer Extended Care Center in New Rochelle and Mount Vernon Hospital and the Dorothea Hopfer School of Nursing in Mount Vernon, will continue to operate business as usual until the acquisition is complete.
The deal is expected to close by the end of this year, subject to Bankruptcy Court and regulatory approvals.
“It”™s a merger of the two facilities,” Spicer said in the radio interview. “But when the dust clears, we are a part of Montefiore. We will be part of the Montefiore Medical Center Health System and frankly, they”™re the lead character here.”
Hospital officials said the purchase “will create a broader and stronger health care infrastructure serving the communities of southern Westchester and the surrounding area.” They said Montefiore is committed to keeping Sound Shore”™s two community-based hospitals and extended care center vibrant.
Sound Shore throughout the sale period will continue to operate as a not-for-profit hospital system, providing treatment to all members of the community regardless of their ability to pay.
Sound Shore officials said the sale of assets under the federal bankruptcy code was designed to ensure the continuity of operations, protect the value of its assets and provide ongoing access to patient care and jobs.
Sound Shore with Montefiore”™s assistance has also secured commitments for debtor-in-possession financing that will ensure sufficient working capital and enable it to continue operating throughout the process.
Spicer in the joint announcement called the sale to Montefiore “the right next step to deliver on our commitment to provide high quality, accessible and affordable health care. Our mission is strong and our dedication to patient care is unchanged. We are fortunate to have Montefiore as a partner because of their clinical excellence, commitment to community and ability to provide the best care at Sound Shore and Mount Vernon hospitals over the long run.”
Dr. Steven M. Safyer, president and CEO of Montefiore Medical Center, said New Rochelle and Mount Vernon “deserve exceptional care close to home. Montefiore looks forward to building on its existing clinical presence in lower Westchester and working with the dedicated doctors, nurses and staff of Sound Shore and Mount Vernon hospitals and the Schaffer Extended Care Center, who have served their patients well over many years.”
Sound Shore Health System and Westchester Medical Center (WMC) last December jointly announced they had begun exclusive talks to explore a “formal corporate relationship.” But on May 7, WMC officials tersely announced they had terminated talks of a possible acquisition of Sound Shore, citing a “dramatically different view” about how to balance investment in Sound Shore facilities and Sound Shore”™s debt obligations.
Sound Shore Health System officials avoided public comment since the WMC announcement, when community reports resurfaced that Montefiore was an interested alternative suitor in New Rochelle. A Montefiore spokeswoman at the time said the medical center would not respond to “rumor and speculation.”
