San Fernando Valley : Council to Hire Attorney as Advisor on Bankrupt Hospital
The San Fernando City Council voted in closed session this week to hire a bankruptcy attorney to protect the city’s interest in Mission Community Hospital.
The hospital, which has facilities in San Fernando and Panorama City, filed for protection under federal bankruptcy laws last week.
The city issued $2.6 million in bonds on behalf of the hospital in 1976 and in exchange received a “reversionary right” to the property after the bonds are paid. Some City Council members have said they are concerned about the impact the bankruptcy filing will have on the hospital owners’ ability to pay back the bonds.
After meeting in a closed session with the city attorney, the council voted 4 to 0 Monday to hire a bankruptcy attorney to examine the city’s position relative to the bonds and the city’s reversionary right. Councilman Ray Ojeda was not present.
City Atty. Michael Estrada said Wednesday that because the hospital filed for protection under Chapter 11 bankruptcy laws, which allow the hospital to reorganize its debt, he believes the hospital owners intend to continue making bond payments. . . .
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