In a letter from counsel, Hudson Regional Hospital told the New Jersey Department of Health that CarePoint Health defaulted on their Bayonne Medical Center lease, though the hospital operator is pushing back on that claim.
“With respect to the certificate of need applications, because CarePoint is in default of its obligations under the Lease and the associated Security Agreement, and HRH’s rights are subject to an action for specific performance, CarePoint’s submissions to the Department are in breach of those agreements, lack force and effect, and are subject to injunctive relief,” Thomas Abbate, of the firm DeCotiis, Fitzpatrick, Cole, & Giblin LLP, wrote to state Health Commissioner Judith Persichilli on Friday.
“Under those documents, in the event of a default, the landlord has the right to demand that CarePoint execute and place the necessary transfer documents in escrow.”
Due to the alleged default, Abbate says that CarePoint and BMC Hospital LLC due not have the legal grounds to seek a certificate of need and/or sell all of the assets of the Peninsula City medical facility.
He is also asking the NJ DOH to approved HRH’s certificate of need and points out that the hospital will continue to run as is through at least the end of the year so as not to interview with operations during the current public health emergency.
In a statement, CarePoint said they had not violated their lease agreement and that they’re top priority remains fighting the COVID-19 pandemic.
“CarePoint Health denies default under the lease, and in fact, Bayonne Medical Center is current on rent payments. The Clinical leadership at Bayonne and other CarePoint hospitals chooses to focus on patient care. We are supporting our communities and are actively gearing up to start the Covid-19 vaccination process for our healthcare workers and our vulnerable population as well as continue to treat and fight the pandemic,” they indicated.
“These statements and actions by Hudson Regional Hospital can demoralize the caregivers and healthcare heroes at Bayonne Hospital who are caring for patients tirelessly during this pandemic. The three CarePoint hospitals have been in the forefront in containing the illness and complications of this highly contagious virus.”
Nevertheless, CarePoint’s “procedural gamesmanship and underhanded tactics” are shown by the fact that no audited financial statements have been produced for 2019, as well as that Titan Capital recently provided them $75 million in funding, Abbate writes.
Whether or not Titan’s financial records pertaining to this transaction go public are still tied up in litigation, but Abbate feels that the conclusion is already pretty obvious.
“We believe that if it inquires the Department will find, as we suspect, that the proposed funding is either illusory or offered on terms that are well outside normal market boundaries,” he said in the letter.
Additionally, HRH intends to to terminate the Bayonne Medical Center management company, replace the current lease with an at-will tenancy, requests that CarePoint deliver transfer documents into escrow, and withdrew their application for a certificate of need, Abbate wrote.
Last month, BMC Hospital LLC acquired 9.9 percent ownership of the Bayonne Medical Center and also revealed they were seeking to increase that figure to 49 percent, a process Abbate contends should be halted due to the alleged lease default.