Strategic Global Management, a for-profit healthcare company, would pay $50 million in cash to acquire two California hospitals out of bankruptcy. However, the hospitals' owner, Verity Health System, is blocking the bid, according to The Wall Street Journal.
El Segundo, Calif.-based Verity entered Chapter 11 bankruptcy in August 2018. In January, the health system closed St. Vincent Medical Center, a 366-bed hospital in Los Angeles, after a deal to sell four of its hospitals to SGM fell through. The health system and SGM are involved in litigation over which party is responsible for the agreement's collapse, according to WSJ.
An affiliate of SGM has now offered to pay $50 million in cash for two of Verity's hospitals: Seton Medical Center in Daly City, Calif., and Seton Coastside, in Moss Beach, Calif. Both hospitals were also part of the deal that collapsed last year.
SGM's efforts to participate in the bidding process for the two hospitals are being blocked by Verity, according to WSJ, which cited court documents.
Seton Medical Center was reportedly on the verge of closing earlier this month. The San Mateo County (Calif.) Board of Supervisors voted March 10 to allocate $5 million annually over the next four years to keep Seton Medical Center in Daly City, Calif., open. The funding will go to the company that buys the hospital.