California AG tries to halt sale of 2 hospitals

A California county's deal to acquire two hospitals from El Segundo, Calif.-based Verity Health is in jeopardy after California Attorney General Xavier Becerra appealed the bankruptcy court's approval of the sale, according to the Silicon Valley Business Journal.

Four things to know:

1. Verity Health operated six hospitals in California when it entered Chapter 11 bankruptcy in August. In December, the bankruptcy court approved Santa Clara County's $235 million offer to buy O'Connor Hospital in San Jose and St. Louise Regional Hospital in Gilroy from Verity.

2. Mr. Becerra appealed the sale because Santa Clara County has not agreed to conditions put in place in 2015 when private hedge fund Blue Mountain Capital acquired six hospitals owned by Los Altos, Calif.-based Daughters of Charity Health System. The deal and name change to Verity were approved, subject to several conditions including that O'Connor Hospital and St. Louise Regional operate as acute care hospitals and offer emergency services for 10 years, according to the report.

3. In approving the sale of the hospitals Dec. 27, U.S. Bankruptcy Judge Ernest M. Robles said the attorney general's office can't halt the sale because it doesn't have oversight authority when a county government is buying a nonprofit hospital.

4. A hearing is set for Jan. 30 in the bankruptcy case, according to the report.

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