Owner of 5 Hospitals Seeks Bankruptcy Protection

The company that owns Palmdale Hospital Medical Center and Pacifica Hospital of the Valley in Sun Valley has filed for reorganization under Chapter 11 of federal bankruptcy laws.

Affiliated Medical Enterprises, a privately held company based in Orange, made the filing in U. S. Bankruptcy Court in Santa Ana last week. Under Chapter 11, a company is shielded from creditors’ lawsuits while it works out a plan to pay its bills.

Dan S. Young, Affiliated’s president and chief executive, said the five hospitals that Affiliated owns “will remain fully functional” while the company attempts to reorganize. There will be “no interruption of any services,” he said. “We plan no hospital closures and no employee layoffs.”

In its filing, Affiliated listed $110 million in debts, including $88 million owed to banks and other lenders involved in the company’s acquisition of four hospitals--including the Palmdale and Sun Valley facilities--from American Health Group International in 1988.

Young said the company sought Chapter 11 protection after it failed to reach agreement with its creditors on restructuring the debt related to the acquisition.