California Attorney General Kamala Harris gave her approval Thursday to a deal that would infuse $280 million in private capital into a financially struggling network of Catholic hospitals, the San Francisco Chronicle writes. Under the proposal, BlueMountain Capital Management, a New York hedge fund, would take over operation of the Daughters of Charity system, which encompasses five hospitals and a nursing center in the Los Angeles and San Francisco Bay areas.
Ms. Harris's approval, required by state law, is conditioned on several restrictions, including an order that four of centers remain as acute-care hospitals with emergency services for at least a decade. BlueMountain, which would have an option to buy Daughters of Charity three years into the agreement, said its executives are reviewing the terms. The hedge fund stepped in over the summer after for-profit hospital operator Prime Healthcare Services withdrew an $843 million offer to buy the nonprofit system due to what the company termed onerous conditions imposed by the attorney general.