Bankrupt California clinic chain's acquisition approved

A bankruptcy court has approved DAP Health's acquisition of Borrego Springs, Calif.-based  Borrego Health. 

Palm Springs, Calif.-based DAP Health — which, like Borrego Health, is a federally qualified health center — was selected by the Borrego Health board of trustees in February as the winning bidder to acquire the clinic chain. The bankruptcy court needed to sign off on the deal, which it did March 1. 

Jeffrey Pomerantz, attorney for the Official Committee of Unsecured Creditors of Borrego Health, said in a statement shared with Becker's that the committee is pleased the sale has been approved. 

"We are confident that with this sale, DAP Health can continue this critically important healthcare mission in the communities it serves," Mr. Pomerantz said. "As an advocate for all unsecured creditors, the committee is also pleased that the sale will allow for all unsecured creditors to be fairly and substantially compensated for goods and services previously provided to Borrego."

Borrego Health serves about 120,000 patients each year. It filed for bankruptcy Sept. 12. The bankruptcy filing came after California Department of Health Care Services officials announced a plan to suspend Medicaid reimbursements following allegations of ongoing fraud and mismanagement at the health clinic. The bankruptcy filing prevented the payment suspension from taking effect. In October, a bankruptcy judge blocked health officials from suspending reimbursements.

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