Judge rejects attorney general's attempt to block sale of 2 California hospitals

A bankruptcy judge has rejected California Attorney General Xavier Becerra's efforts to block the sale of O'Connor Hospital in San Jose and St. Louise Regional Hospital in Gilroy, according to The Mercury News.

El Segundo, Calif.-based 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 and St. Louise Regional Hospital from Verity.

Mr. Becerra filed a petition to suspend the sale in early January. He wants to block the deal because Santa Clara County has not agreed to conditions put in place in 2015 when private hedge fund BlueMountain 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.

In approving the sale of the hospitals Dec. 27, U.S. Bankruptcy Judge Ernest M. Robles said the attorney general's office couldn't halt the sale because it doesn't have oversight authority when a county government is buying a nonprofit hospital. The judge affirmed his decision this week.

"The Attorney General still has not identified any specific statutory provision that establishes his authority to review the sale," Mr. Robles wrote in a tentative ruling, which was finalized Jan. 30, according to The Mercury News.

In a statement released after the hearing, Mr. Becerra said: "This decision unfortunately strips our office of the authority to protect patients when hospitals are transferred to public entities like the County of Santa Clara. This is concerning, since the County of Santa Clara would not articulate which of these important patient protections and services that were a condition for the operation of Verity's hospitals would survive in the transfer of ownership. Nor would Santa Clara County explain why it would not commit to maintain these levels of patient protections and services."

More articles on legal and regulatory issues:

Ex-CEO gets 46 months in prison for defrauding Florida hospital
New York hospital let woman end life support for stranger, lawsuit claims
10 employees hit NewYork-Presbyterian with $15M discrimination suit



Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars