Despite objections for California attorney general and a last-minute attempt from an opposing bidder to block the sale, El Segundo, Calif.-based Verity Health System won bankruptcy court approval to sell a 384-bed hospital in Lynwood, Calif., to Prime Healthcare Services, according to The Wall Street Journal.
California Attorney General Xavier Becerra conditionally approved the sale to Prime in July. Mr. Becerra set 21 conditions for the sale of St. Francis Medical Center to Prime Healthcare, a for-profit provider based in Ontario, Calif.
Verity challenged three of the conditions outlined by the attorney general, saying they were overly burdensome. The disputed conditions revolved around the amount of charity care and community-benefit services the hospital would need to provide.
As a result, the attorney general opposed authorizing the sale and approving Verity’s Chapter 11 liquidation plan, according to the Journal.
U.S. Bankruptcy Judge Ernest Robles overruled the objections, which should allow the $350 million sale to finalize. The judge also said he would approve Verity’s Chapter 11 liquidation plan.
In addition, in late July, Los Angeles-based Prospect Medical Holdings made a last-minute attempt to block Prime from buying St. Francis Medical Center.
Prospect Medical, backed by a private equity firm, reportedly offered to pay $50 million more than Prime and offered to accept all of the attorney general’s conditions.
However, the bankruptcy judge said Prospect lacked standing to oppose the Prime sale, and it didn’t submit its bid until after the deadline passed, according to the report.
Read the full article here.
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