The deal comes as Palm Springs, Calif.-based DAP Health agreed to take over Borrego’s network of 18 clinics. Borrego will now resolve the claim against them for $20 million instead of the original $110 million.
The clinic network filed for bankruptcy in September 2022 due to a payment suspension from the state related to a fraud investigation.
“We had initially hoped for a different outcome and envisioned a process where we could work with the state to hold the wrongdoers accountable and also overcome the staggering debt,” Sandra Hansberger, Borrego Health chair, told the Union-Tribune.
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