Daughters of Charity Health System announced Monday that it has finalized a $260 million investment deal that will see a New York hedge fund take over management of its six nonprofit hospitals in the San Francisco Bay and Los Angeles areas, reports the San Jose Mercury News.
The pact ends nearly two years of financial limbo for the Catholic hospital chain, which has lost hundreds of millions of dollars in recent years and has said it would face bankruptcy unless it could find a savior. BlueMountain Capital Management will create an offshoot to run the renamed Verity Health System, facilities of which will lose their church affiliation but remain nonprofit for up to 15 years.
Under terms imposed by California Attorney General Kamala Harris, whose office must approve deals involving nonprofit hospitals, Verity must maintain historic levels of charity care and keep at least five of the safety-net facilities open for at least a decade. Similar conditions scuttled for-profit Prime Healthcare Services' $843 million offer to buy Daughters of Charity outright, which the company withdrew earlier this year.