Lawsuit Calls for Interfaith Board of Trustees to Step Down

By Paul DeBenedetto on November 11, 2013 9:20am 

 A lawsuit calls on Interfaith's board of trustees to step down due to allegedly mismanaging the hospital.
A lawsuit calls on Interfaith's board of trustees to step down due to allegedly mismanaging the hospital.
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DNAinfo/Michael Phillis

BEDFORD-STUYVESANT — Central Brooklyn residents are calling on Interfaith Medical Center's board of trustees to step down for allegedly mismanaging the hospital, according to a lawsuit filed in Brooklyn Civil Supreme Court.

The lawsuit, filed on Oct. 30 by Cassandra McFadden of the People's Committee to Save Interfaith Medical Center, accuses the board of failing to add a "financial expert" to their group, and focusing only on closing the hospital rather than trying to save it from bankruptcy.

"The Trustees' breach of duty to care has harmed the Central Brooklyn community by jeopardizing access by the community to needed health care services," the lawsuit reads.

The board submitted 18 "inadequate" restructuring plans to the state Department of Health, according to the suit, each rejected by the DOH. In July, the state asked for a closure plan, and the hospital asked a federal bankruptcy court for permission to close by mid-November.

But the state Attorney General's Office has thus far deemed the board's closure plan unacceptable, and the closure process has since encountered monthly delays, including a reprieve last week through Nov. 15, according to a report in the Brooklyn Daily Eagle.

The suit also alleges that the board's attorneys, from the firm of Willkie Farr & Gallagher, are steering the hospital board toward a lengthier liquidation process rather than avoiding bankruptcy, in order to generate more legal fees.

An attorney at Willkie Farr & Gallagher did not return a request for comment, but in court papers, the firm said the suit "merely makes multiple inaccurate allegations unworthy of a response," as Crain's reported.

The "People's Committee" are seeking to remove the hospital's board and the lawfirm representing them, as well as restitution of $55 million for financial losses and fees paid to Willkie Farr & Gallagher.

McFadden said the group has been advocating on Interfaith's behalf since it first began having financial problems.

In 2010, the State reduced Medicaid reimbursements, cutting off a crucial funding stream for the hospital, which serves as a primary care facility for a large number of low-income residents. In 2010, Interfaith filed for bankruptcy.

The fight for Interfaith is also a personal one, McFadden said.

"They saved my mother's life — my mother had fluid in her lungs — and they operated on my son's legs, and he doesn't even walk with a limp now," McFadden told DNAinfo New York. "It's a hospital that's going to stay open, and we're going to do whatever it takes."

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