Lake Shore Hospital will officially exit bankruptcy and affiliate with Kaleida effective Jan. 1.

It is a happy New Year already for TLC, which announced Thursday that Lake Shore Hospital will officially exit bankruptcy today and affiliate with Kaleida effective Jan. 1. However, it is sad news too, as the hospital says goodbye to the leader that navigated the process.

In a letter released to employees, staff, the board of directors and the community Thursday, President and CEO John Galati gave the good news first.

“Progress has been made regarding the bankruptcy,” the letter said. “On Dec. 12, the bankruptcy court approved the confirmation order that consisted of the settlement plan by the creditors and TLC’s exit strategy that included the hospital’s service lines, merger with Brooks and management agreement/affiliation with Kaleida. The effective date is Friday, Dec. 29.

“After the 29th, TLC is back to its pre-bankruptcy status and can conduct business/sign contracts in normal terms without having to seek court approval. The Management Agreement with Kaleida for day-to-day operations under the direction of the TLC Board of Directors will be effective Jan. 1, 2018. The merger between TLC and Brooks is expected to take place within the first quarter of 2018. TLC will begin to make payouts to creditors starting on Dec. 29.”

The community thought the hospital would close at the end of 2013, but rallied behind the institution. Galati was brought on and the hospital entered Chapter 11 bankruptcy to restructure its operations.

During that time, Lake Shore also separated from the Lake Erie Regional Health System, a partnership with Brooks Memorial Hospital. However, later the two hospitals decided to give partnership another go and will be affiliated under Kaleida, which also operates Buffalo General, Gates Vascular Institute, DeGraff Memorial, Millard Fillmore Suburban and John R. Oishei Children’s hospitals.

Under the plan, Brooks will provide traditional inpatient services at its new facility planned for Route 20 in the town of Pomfret. Lake Shore has already started renovations that will allow it to provide complementary out-patient and ambulatory services.

Another part of the bargain is saying goodbye to Galati, who said he made a great many friends while heading up the Irving facility.

“It has been an honor to serve as the President and CEO of TLC Health Network — Lake Shore Hospital and Nursing Home for the past four years. During that time it was my privilege to work with all of you in developing initiatives that have helped to secure the hospital’s reputation for excellence in providing quality health care services and customer satisfaction. In leaving TLC and the community I will always cherish the friendships and relationships that were formed. The support shown for the hospital and nursing home has always been strong. I trust that this will continue as TLC positions itself for the future,” he said in the letter.

He will continue to work with the finance office to coordinate creditors’ payments but his last day at Lake Shore is today.

Galati was the leader during the sometimes tumultuous bankruptcy process, but he gave credit to all for making the hospital a viable establishment in the community.

“We can all be proud of our accomplishments especially during the times of uncertainty and limited resources. All of you are to be commended for the personalized care and attention provided to patients and residents. Your dedication, loyalty and commitment have made TLC a very special place where all are welcomed and respected,” he said. “I am grateful to have had the opportunity to be part of TLC’s history contributing to the traditions of care that began in 1963 with the founding of Lake Shore Hospital. I thank each of you for the care and attention you provided every day to patients, residents, their family members, visitors, guests and each other. I extend my best wishes to you and your families for a promising future. Thank you for allowing me to be a part of your lives.”