Verity Health System of California, Inc. (“Verity Health”), a nonprofit healthcare system, today filed a motion in the U.S. Bankruptcy Court in Los Angeles seeking bankruptcy court approval of a procedure to obtain bids leading to a potential auction of its hospitals in Santa Clara County. The process is being led by an asset purchase agreement with the County of Santa Clara (“the County”) where the County’s offer serves as an initial “stalking horse bid” to acquire O’Connor Hospital in San Jose, Calif. and Saint Louise Regional Hospital in Gilroy, Calif., including the De Paul Health Center in Morgan Hill, Calif., under Section 363 of the U.S. Bankruptcy Code. Verity Health has requested court approval of an orderly auction process where other potential buyers can submit qualified competing bids against the Stalking Horse Bid. The winning bid, as selected by the Verity Health Board of Directors, in consultation with its professional legal and financial advisors, is subject to the approval of the Bankruptcy Court, and, depending on the buyer, the California Attorney General. The timeline requested by Verity Health would result in an auction in December 2018.
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