Ventura County Supervisors Vote To Purchase Santa Paula Memorial Hospital
The Ventura County Board of Supervisors on Tuesday voted unanimously to purchase Santa Paula Memorial Hospital through a deal with the bankrupt hospital's creditors that bypasses the hospital board of trustees, the Ventura County Star reports (Wilson, Ventura County Star, 9/15). During a closed session, supervisors reviewed the creditors' plan, which already has received support from Santa Paula city officials. "There are still some numbers to work on, but if it all pencils out by the end of this month, we hope to have a deal," Supervisor Kathy Long said (Saillant, Los Angeles Times, 9/15).
The hospital board and the county board of supervisors have been negotiating since June 2003 to incorporate Santa Paula Memorial into the county health care system. The 49-bed facility, which operated the only emergency department between the cities of Santa Clarita and Ventura, closed in December.
The hospital's board of trustees filed for Chapter 11 bankruptcy protection in federal court in Santa Barbara three days after the closure. Court documents list no claims or creditors, but board members have said that the not-for-profit hospital has debts of about $7.5 million and about 400 creditors (California Healthline, 6/30). Some debt estimates are as high as $14 million.
Under the creditors' proposal, the county would absorb about $2.7 million in debt in return for the hospital's title and 13 acres of land. Another 16 acres would be sold to a developer for as much as $12 million (Los Angeles Times, 9/15).
Long said county supervisors have received a letter of intent from the creditors but have not yet received a signed sales agreement (Ventura County Star, 9/15). Supervisors added that "many legal and financial details remain" before the plan can be approved, the Times reports (Los Angeles Times, 9/15). A public hearing will be held Oct. 5 to consider the agreement. Long said that if the plan is approved, the hospital would not likely reopen before 2005 (Ventura County Star, 9/15).
Meanwhile, Santa Paula Memorial's board of trustees has said that it is working with Kare Healthcare on a rival business proposal (Los Angeles Times, 9/15). The hospital board and Kare signed an agreement in June to allow Kare to prepare a business plan for the hospital and take over management of the facility (California Healthline, 6/28).
Santa Paula City Council member Mary Ann Krause said the U.S. bankruptcy judge overseeing the Chapter 11 case would likely certify the creditor committee's proposal over the hospital board's plan. "The hospital trustees don't have a plan yet, and it's hard to imagine how they could put together one that pays off the debt and reopens the hospital," she said, adding that the creditor committee's plan could be submitted to the bankruptcy judge by early next month (Los Angeles Times, 9/15).