2012-05-18 / Top Stories

City Demands Return Of PHC Money

Grant Issued In 2006
By Howard Schwach

The city wants its $631,300 back.

With the closure of Peninsula Hospital Center and the impending sale of its assets by a federal bankruptcy trustee, the city moved in the Eastern District federal court on May 8 for the return of a grant the city’s Department of Health and Mental Hygiene had given PHC on July 1, 2006 to buy “expensive equipment needed by the hospital, including inpatient dialysis equipment, X-ray equipment to be used in the emergency department and a spect camera for nuclear medicine.”

The grant was specifically funded by Queens Borough President Helen Marshall and the City Council for the immediate needs of PHC, records show.

While it is not clear whether or not the equipment was ever purchased or put to use, the city wants either its money or restitution of the money the sale of the equipment would bring to the creditors.

“In order to qualify as a funding recipient under this grant, the hospital had to meet certain conditions and comply with several covenants and representations,” the papers, filed by the DOHMH and the city’s Corporation Counsel said. “Because of the breaches of its covenants and representations by the hospital, the [city] has no obligation to fund the equipment that might have been purchased under this grant.”

It seeks whatever money is left from the grant or “restitution of any portion of funding disbursed, with interest and late charges from the date of the disbursement.”

The city says that it needs the money to “re-allocate the funds and designate a new beneficiary.”

Court officials say that no date has been set for a hearing on the city’s motion.

Legal experts say that since the grant was more than five years old, the bankruptcy court could consider the equipment purchased with the grant money as part of the hospital’s assets and therefore assets of the creditors under the bankruptcy laws.

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