CANOGA PARK : Bankrupt Health Care Firm to Shut 139-Bed Hospital
A bankrupt health care company said Wednesday it will close West Valley Hospital and Health Center in Canoga Park after failing to find a buyer for the money-losing, 139-bed facility.
Triad Healthcare Inc. of Encino said that closing the hospital will financially strengthen its other holding, the more prominent Sherman Oaks Hospital and Health Center, which operates a well-known burn center and HIV-treatment ward.
Triad said that about 250 employees will lose their jobs when the hospital is shut down Sunday. On Wednesday, 15 patients remained at West Valley while doctors and family members arranged for their transfer to other hospitals.
The financial future of both hospitals became clouded last year when Triad declared bankruptcy after defaulting on a $167-million loan insured by the state.
Triad acquired the hospitals in 1991 with the help of a loan guarantee by Cal-Mortgage, a state program that has helped many health care institutions qualify for low-interest loans.
But Triad defaulted in July, 1993, forcing state officials to suspend the program and potentially leaving taxpayers on the hook for the loan. The default damaged the hospitals’ reputations and triggered state investigations.