Eastern Niagara Hospital received $5.8 million in federal Paycheck Protection Program funds and has brought back all of its furloughed employees.
The hospital was initially denied for PPP funding in April because of its Chapter 11 bankruptcy case. In May, the health care center sued the Small Business Administration over the denial. In late June, ENH requested a dismissal from its Chapter 11 case in order to qualify for the PPP loan.
"Section 1112(b) of the U.S. Bankruptcy Code permits parties to seek dismissal of a case for cause, provided it is in the best interest of creditors. The Order Dismissing the Chapter 11 Case was signed by Chief U.S. Bankruptcy Judge Carl L. Bucki on June 24th. Subsequently, the hospital re-applied for the Paycheck Protection Program and was immediately approved by the SBA,"
Hospital Spokesperson Carolyn Moore confirmed on Wednesday that the hospital withdrew its lawsuit and re-applied for PPP funding.
She said the hospital was permitted, under U.S. Bankruptcy Code, to seek dismissal of a case for cause, provided it was in the best interest of creditors. An order dismissing the Chapter 11 case was signed by U.S. Bankruptcy Judge Carl L. Bucki on June 24. In a statement, hospital officials said they re-applied for the Paycheck Protection Program. On June 26, ENH received $5.8 million in PPP funds, a forgivable loan with the purpose of supporting payroll and benefit.
Hospital CEO Anne McCaffrey said on Wednesday the hospital has refiled for Chapter 11 protection.
"This financial reorganization must be concluded to ensure our sustainability. As the COVID-19 pandemic has confirmed, the hospital is essential to our community. We have a responsibility to the residents of our entire region to continue our critical services for years to come," McCaffrey said.