Bankruptcy judge OKs sale of St. Vincent hospital to Patrick Soon-Shiong
A federal bankruptcy judge on Friday approved the sale of a shuttered Los Angeles hospital to Dr. Patrick Soon-Shiong, who plans to create a coronavirus research facility on the campus.
Judge Ernest M. Robles signed an order authorizing the sale of St. Vincent Medical Center for $135 million to Soon-Shiong.
Robles, in a tentative ruling issued earlier in the day, wrote, “Prompt closing of the sale is necessary given the estates’ precarious financial position. In addition, there is a risk that the purchaser will walk away if the sale does not close promptly, since the purpose of the sale — establishing a research center to address the COVID-19 pandemic — would be defeated absent a prompt closing.”
Soon-Shiong heads Culver City-based global health firm NantWorks, and owns The Times.
Hospital chain owner Verity Health filed for bankruptcy protection in 2018, and earlier this year proposed selling St. Vincent Medical Center to a foundation run by Soon-Shiong and his wife, Michele B. Chan. A separate Soon-Shiong-controlled company is one of the secured creditors in Verity’s bankruptcy proceedings.
Friday’s hearing came two days after California Atty. Gen. Xavier Becerra raised objections to the sale, arguing in a court filing that his office needed to review the deal. The attorney general has the authority to oversee the transfer of nonprofit healthcare facilities in California.
In his court filing, Becerra also took issue with Verity selling the hospital to the Chan Soon-Shiong Family Foundation, stating it could be a problem under California laws governing nonprofit public benefit corporations, according to the court filing.
Both of Becerra’s concerns appeared to have been dealt with Friday.
Verity representatives said at the court hearing that they would cancel the hospital’s operating license, thus ending the need for the attorney general to review the sale.
In response to the attorney general’s objections, Soon-Shiong said this week he would personally buy the hospital — rather than through the foundation — “to avoid the baseless appearance of a conflict.” Attorneys for Soon-Shiong filed court papers Friday indicating that he would purchase the property through three limited liability corporations.
David Eldan, an attorney with the attorney general’s office, told Robles at Friday’s hearing the issue was “resolved.”
A representative for Soon-Shiong said Friday afternoon that he hadn’t had time to review the judge’s tentative decision.
The state of California announced plans last month to lease St. Vincent to help with the COVID-19 crisis, and has announced plans to open a temporary hospital on the campus on Monday.
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