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The shuttered Sheehan Health Network hospital could hit the auction block before winter after a bankruptcy judge Thursday granted a motion naming a New York City auction house to handle the deal.
Madison Hawk will oversee the sale of the 270,000-square-foot hospital and its 8-acre Michigan Avenue site, and will be guaranteed a commission of at least $50,000.
“I am satisfied the recommendation appears generally to be reasonable,” said Western District Chief Judge Carl Bucki, who approved the motion from hospital attorneys.
Though no auction date was set Thursday, attorney Garry M. Graber of Hodgson Russ, the firm representing the closed hospital, said Sheehan’s goal is to sell the property and close on a deal before winter.
Sheehan Health Network, which had survived for 128 years while often treating the poorest and most underserved population in Buffalo’s core, announced in March that it could no longer financially sustain itself.
It had provided primary care, diagnostic services and alcohol- and drug-dependency treatment and rehabilitation to about 10,000 patients, on both an inpatient and outpatient basis.
The hospital filed for bankruptcy in late August, which cleared the way for an auction. It listed $6.3 million in assets, with liabilities totaling nearly $5.5 million, according to documents filed with U.S. Bankruptcy Court in Buffalo. Its biggest assets are the building and grounds.
Its secured liabilities include $1.9 million owed to New York State for Medicaid overpayments, $485,100 to General Electric Capital Corp. and $291,800 to Omnicare of Western New York.
The bankruptcy filing listed the Internal Revenue Service as Sheehan Memorial’s biggest unsecured creditor, being owed more than $845,000 in taxes. The company also owes nearly $215,000 to Family Medicine-University at Buffalo, more than $93,000 to the state Labor Department for unemployment insurance payments and more than $126,600 to National Grid.
UNYTS, an organ transplant organization that plans to consolidate its operations into one location downtown, has previously expressed a possible interest in purchasing the property. The nonprofit – formerly known as Upstate New York Transplant Services – owns space at 110 Broadway in Buffalo and leases space at 90 Curtwright Drive in Amherst but has outgrown those sites and wants to combine the two locations into one with ample parking.
Thursday’s Bankruptcy Court ruling was the latest development in what is the third time the medical center has been in Chapter 11, Bucki noted.
Bucki scheduled another hearing for 11 a.m. Nov. 19 to resolve how the auctioneer will get paid for its marketing services, Graber said.

email: dswilliams@buffnews.com