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September 22, 2015

Firm Sues Calif. Attorney General Over Scotched Sale of Catholic Hospitals

For-profit hospital operator Prime Healthcare Services has filed suit against California Attorney General Kamala Harris for imposing restrictions on the company's planned purchase of six Catholic medical centers, the Los Angeles Times writes.

The firm says it was forced to withdraw its $843 million offer for the financially struggling Daughters of Charity Health System in March after Ms. Harris conditioned her approval of the deal on Prime pledging to keep the hospitals open for at least 10 years and match their level of charity care. The company alleges the attorney general did not impartially review the sale and instead sided with SEIU, a politically influential labor union that opposed the sale.

Kristin Ford, a Harris spokeswoman, said in a statement that the conditions aimed to ensure the hospitals continued to serve their communities and that Prime's pull-out showed the firm "never intended to prioritize the continuity of vital health services." The attorney general has yet to rule on a new offer from a New York investment firm to provide a $250-million lifeline to Daughters of Charity and take over management of its hospitals, which would remain nonprofit.