Verity Health System Enters into Asset Purchase Agreement with Santa Clara County
- Santa Clara County has entered into an agreement to acquire O’Connor Hospital in San Jose, Calif., and Saint Louise Regional Hospital in Gilroy, Calif., for $235 million
- Verity Health continues to actively seek potential buyers for its other hospitals
- All Verity Health hospitals continue to provide high-quality care to patients throughout the Chapter 11 process
Verity Health System of California, Inc. (“Verity Health”), a nonprofit healthcare system, today filed a motion in the U.S. Bankruptcy Court in Los Angeles seeking bankruptcy court approval of a procedure to obtain bids leading to a potential auction of its hospitals in Santa Clara County. The process is being led by an asset purchase agreement with the County of Santa Clara (“the County”) where the County’s offer serves as an initial “stalking horse bid” to acquire O’Connor Hospital in San Jose, Calif. and Saint Louise Regional Hospital in Gilroy, Calif., including the De Paul Health Center in Morgan Hill, Calif., under Section 363 of the U.S. Bankruptcy Code. Verity Health has requested court approval of an orderly auction process where other potential buyers can submit qualified competing bids against the Stalking Horse Bid. The winning bid, as selected by the Verity Health Board of Directors, in consultation with its professional legal and financial advisors, is subject to the approval of the Bankruptcy Court, and, depending on the buyer, the California Attorney General. The timeline requested by Verity Health would result in an auction in December 2018.
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