California hospital owner files for bankruptcy

West Contra Costa Healthcare District, which owns shuttered Doctors Medical Center in San Pablo, Calif., filed for Chapter 9 bankruptcy protection Oct. 20.

The healthcare district filed for bankruptcy after a hotel operator rescinded its offer to buy DMC's campus, according to the East Bay Times.

DMC closed in April 2015 after years of financial struggles. The hospital primarily served low-income and uninsured populations in West Contra Costa County. 

In January, the West Contra Costa Healthcare District board accepted Royal Guest Hotels' offer to buy the majority of DMC's campus. However, Eric Zell, hospital district board chairman, told the East Bay Times the hotel operator recently pulled its offer.

"With no chance to bring in revenue in the short term to cover existing district expenses, such as worker compensation claims and medical record storage, the district board voted unanimously to file for bankruptcy to allow for the orderly disposition of remaining financial obligations, including those owed to past district employees and vendors," Mr. Zell said.

According to the bankruptcy petition, the healthcare district has at least $50 million in liabilities.

Royal Guest Hotels did not respond to the East Bay Times' request for comment.

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