The US Bankruptcy Court approved the sale last week and the newownership is arranging for the continued operation of both of theseprograms, the hospital's clinics and other medical services undernew management. GlobeSt.com has learned that the Skilled NursingFacility is operated on the site of the 333,000-sf Main Campus thatis being sold to Sunset and the Lombardi Home Health Program is ahome care program "so little to no space is needed to operate thebusiness in the ordinary course."

According to CIT, the transaction, when completed, will be "oneof the first successful sales and restructurings of medicalservices at a hospital slated for closure by the BergerCommission," a non-partisan panel created by former Gov. GeorgePataki and the New York State Legislature to review the regionaland local supply of hospital and nursing home beds throughout theState. Natalie Wilensky, managing director of CIT InvestmentBanking Services, Real Estate, tells GlobeSt.com that thetransaction is subject to Department of Health approval and isexpected to close in Q4 2008. "Much work was done in advance of anauction to involve DOH in the bidder prequalification process andgain certain assurances that the buyer and its operating partnerswould likely pass DOH approval requirements."

She notes that "this deal is a great example of how financiallystressed institutions can effectively monetize real estate assetsand restructure services so that business continues and communityneeds are served." As far as reasons for selling, Wilensky saysthat upon learning that the Berger Commission would recommend thatVictory close as a hospital and its 240 acute care beds bedecertified, Victory filed for Bankruptcy protection in November2006. "At the time of filing, Victory's liabilities exceeded itsassets; hence, unsecured creditors wanted assets sold to repaydebts." She says that in June, 2007, CIT was engaged as the realestate advisor by both the debtor and the Official Committee ofUnsecured Creditors to sell the real property and the relatedbusinesses "for the benefit of creditors."