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Verity Health System Files Motion to Enforce Sale Order

18:34 EDT 2 Oct 2019 | Businesswire

Verity Health System of California, Inc. (“Verity”), a nonprofit healthcare system, filed a motion in the U.S. Bankruptcy Court for the Central District of California to enforce the sale order related to its four hospitals – St. Francis Medical Center, St. Vincent Medical Center, Seton Medical Center and Seton Coastside – to the KPC Group.

Last week, the Attorney General of California approved the sale subject to conditions which threaten the sale. The motion filed by Verity seeks a ruling from the Court that finds these conditions imposed by the Attorney General are unenforceable.

Richard Adcock, CEO of Verity said: “Absent relief from the Court, the sale of the hospitals to the KPC Group likely will collapse, jeopardizing the continued operation of these facilities as hospitals, which would result in the loss of access to critical healthcare in underserved communities, as well as thousands of jobs and anticipated recoveries to trade vendors, retirees, physicians, employees and other creditors.”

Peter Chadwick, Managing Director at Berkeley Research Group and the financial advisor to Verity, said, “The conditions lock the hospitals into an untenable operating model and ensure their economic demise.”

Verity’s hospitals had more than 34,000 inpatient admissions and 312,000 outpatient visits in the past fiscal year.

KPC Group, which has pledged to continue operation of the facilities as hospitals, and to honor many conditions imposed by the Attorney General, has publicly stated that it will not close the sale unless Verity is able to obtain Court relief. During the extensive sale process, KPC Group was the only bidder to promise to keep all the hospitals open and operating.

Both Mr. Adcock and Mr. Baronoff, CEO of KPC Group, along with other stakeholders, recently urged the Attorney General’s office in meetings to consider the impact of the conditions on the future viability of the hospitals.

The sale is supported by, among others, the California Nurses Association, Service Employees International Union, United Nurses Association of California, National Union of Healthcare Workers, The Engineers and Scientists of California Local 20 IFPTE, and IUOE Stationary Engineers Local 39, as well as the Official Committee of Unsecured Creditors, secured lenders, and the Pension Benefit Guaranty Corporation.

The hearing is scheduled in the U.S. Bankruptcy Court for the Central District of California on October 15, 2019.

For access to the full motion filed with the Court, please visit: http://www.kccllc.net/verityhealth/document/1820151190930000000000020.

Edelman
Jenny Kantor
646-648-8260
Jenny.Kantor@edelman.com

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