SAN FERNANDO VALLEY : Bankruptcy Trustee for 2 Hospitals to Be Named
Two San Fernando Valley hospitals will soon be under the direction of a federal bankruptcy trustee, ending an increasingly acrimonious standoff between the hospitals’ owner, Triad Healthcare, and Triad’s largest creditor, the state of California.
Judge Arthur M. Greenwald of the U.S. Bankruptcy Court in Los Angeles on Monday ordered the appointment of a trustee after lawyers for Triad and the state agreed that they could not work out their differences. Greenwald also ordered that Alpha Partners, a management company at the center of the dispute, remain in charge of the hospitals until the trustee has a chance to review the situation.
Triad owns Sherman Oaks Hospital and Health Center in Sherman Oaks and West Valley Hospital and Health Center in Canoga Park. The company filed for bankruptcy last week, listing, among other reasons, its desire to fire Alpha. The previous week, lawyers for the state had obtained a temporary restraining order from Superior Court barring Triad from doing so.
The court actions follow Triad’s default last summer on a $167-million loan insured by the state’s Cal-Mortgage program. The default has forced state officials to halt issuance of loan guarantees.
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