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Judge orders Tower Health to restart sale of 2 closed hospitals

A Pennsylvania Court of Common Pleas judge ordered Tower Health to restart the sale process of two now-shuttered hospitals to a Texas turnaround firm, The Daily Local reported Feb. 14.

West Reading, Pa.-based Tower Health closed Brandywine Hospital in Coatesville, Pa., on Jan. 31 and Jennersville Hospital in West Grove, Pa., on Dec. 31, 2021. The decision to close both facilities came after Tower Health terminated a deal with Canyon Atlantic Partners in December 2021. Under that deal, Canyon Atlantic was set to assume ownership and operation of both hospitals Jan. 1, but Tower Health called off the deal, saying Canyon Atlantic was unable to demonstrate that it could effectively take over ownership and operation of the two hospitals. 

In a 10-page order, Judge Edward Griffith found that Tower Health "interfered with Canyon's ability to provide necessary information to its finance partners, respond to Tower Health's questions regarding financing, work through the regulatory process to secure licenses, and complete other necessary tasks," according to The Daily Local.

The judge also ruled that the deal's termination would cause harm to both Canyon Atlantic and the greater community. 

"Absent enforcement of the agreement, Canyon will lose this opportunity forever," Mr. Griffith wrote. "No harm is suffered by Tower Health if the relief sought by Canyon is entered.”

Mr. Griffith also ruled that Tower Health's notice terminating the sale of both hospitals was "null and void" and that the health system must maintain and preserve the current state of both hospitals. Additionally, Tower can no longer transfer the facility's assets to others.

The judge also gave Canyon Atlantic 90 days to evaluate the condition of the hospitals and to determine what steps it must take to complete the sale. Canyon must also pay $1 million in 10 days, the amount it agreed to pay Tower Health for the two facilities.

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