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Judge Blocks Lawsuit Seeking Public Access to St. Vincent's Financial Records

By DNAinfo Staff on September 2, 2010 3:13pm  | Updated on September 3, 2010 6:07am

A judge at Bankruptcy Court at One Bowling Green ruled Thursday that a lawsuit filed by hospital advocates violated Chapter 11 proceedings.
A judge at Bankruptcy Court at One Bowling Green ruled Thursday that a lawsuit filed by hospital advocates violated Chapter 11 proceedings.
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DNAinfo/Tara Kyle

By Tara Kyle

DNAinfo Reporter/Producer

MUNICIPAL DISTRICT — A bankruptcy court judge blocked a lawsuit seeking the release of St. Vincent's Hospital's financial records prior to its financial collapse, saying her court's ability to do its job came before the public's right to know.

The Manhattan Supreme Court case was set to have a hearing next week, but Judge Cecelia Morris effectively quashed the lawsuit, saying the court case was in violation of St. Vincent's current bankruptcy court proceedings.

“The petitioner’s alleged right to public information must yield to the debtor’s right to reorganize,” Morris said Thursday at the US Bankruptcy Court, Southern District in lower Manhattan.

Attorney for St. Vincent's Adam Rogoff (left) and spokesperson Veronica Sullivan (right) exit Bankruptcy Court Thursday.
Attorney for St. Vincent's Adam Rogoff (left) and spokesperson Veronica Sullivan (right) exit Bankruptcy Court Thursday.
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DNAinfo/Tara Kyle

Civil rights lawyer Yetta Kurland, who filed the lawsuit in Manhattan Supreme Court along with other advocates pushing for the documents' release, argued Thursday that the public’s right to review New York State Department of Health documents related to the hospital’s closure did not violate the hospital’s bankruptcy case.

“This is simply a FOIL [Freedom of Information Law] request,” Kurland told Judge Morris on Thursday. “Public record is the property of the public.”

But Adam Rogoff, counsel for St. Vincent’s, said the lawsuit filed by Kurland, local lawyer Thomas Shanahan and others represented an effort to circumvent the bankruptcy court’s proceedings and re-litigate the hospital’s closure.

Morris also took issue with affidavits attached to the lawsuit that include accusations of wasteful hospital expenditures including a $300,000 golf event and $10 million in annual executive salaries.

Morris suggested that because those claims provided unnecessary background information, they represented an attempt to conduct discovery and prepare a fraud cause, which is in the exclusive jurisdiction of the bankruptcy court.

“The motivation of the petitioners is highly relevant in bankruptcy court,” she said.

Rogoff said he was happy with the judge's decision.

“It underscores that this is not about the debtors hiding anything,” he said, saying that the $300,000 golf outing was a charity event that raised 2 1/2 times its price tag. “These types of proceedings are very upsetting because there are a tremendous amount of irresponsible statements being made.”

Kurland, however, called the ruling “unbelievable" and took issue with Morris' implication that she was building a fraud case.

“I’m deeply disappointed by the decision today,” Kurland said, adding that she was considering an appeal. “This really is a chilling day for freedom of information.”