Verity Health System receives emergency approval to close St. Vincent

By Caroline Salls

Pittsburgh, Jan. 10 – Verity Health System of California, Inc. received court approval to close its St. Vincent Medical Center, according to an order filed Thursday with the U.S. Bankruptcy Court for the Central District of California.

Verity also obtained approval to close St. Vincent Dialysis Center, Inc.

The company said it asked the court to grant the motion on an emergency basis given St. Vincent’s continuing economic losses, the Verity debtors’ need to have sufficient cash on hand for the orderly closure of St. Vincent, an anticipated acceleration of staff turnover, the fact that it will take at a minimum of one month to safely transfer all patient care and the fact that Verity cannot continue to subsidize St. Vincent’s operations without putting the continued existence of the entire Verity Health System at risk.

As previously reported, the sale of St. Vincent to Strategic Global Management, Inc. did not close as expected.

“At this point, any delay in St. Vincent’s closure will significantly impact these cases because St. Vincent operates with cash losses that put the entire Verity Health System at peril under the current circumstances,” the motion said.

Verity said St. Vincent lost roughly $65 million in fiscal year 2019, which translates to daily cash losses of more than $175,000.

As a result, the company said there are limited cash resources available for continued operation and patient care, which cannot at this stage be mitigated by either additional external financing or sale prospects.

The order requires Verity to submit a status report regarding implementation of its closure plan by Jan. 23 and to file subsequent status reports every two weeks until the closure plan has been fully implemented.

Verity is a Los Angeles-based nonprofit health care system. The company filed bankruptcy on Aug. 31, 2018 under Chapter 11 case number 18-20151.

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