A California hospital chain managed by Los Angeles billionaire Patrick Soon-Shiong filed a bankruptcy petition on Friday citing rising losses and debt to find a new buyer.
Verity Health System, the nonprofit company that operates six hospitals in the state, said its facilities will remain open as the company restructures, the Los Angeles Times reported.
The hospitals reportedly fought financially for years. In 2015, the hospitals were acquired by BlueMountain Capital Management, a New York-based hedge fund. Then, in July 2017, Soon-Shiong's holding company acquired a majority stake in the hedge fund, the San Francisco Chronicle reported.
Soon-Shiong, a former physician who bought the Los Angeles Times earlier this year, resigned his plan to revitalize the company, which at the time was responsible for more than $ 1 billion, according to its CEO Rich Adcock. But these plans have obviously failed.
"It has become clear from the announcement of the bankruptcy that he had virtually no intention of keeping these hospitals open and continuing to serve the poor as [the previous owners]."
"It has become clear from the announcement of the bankruptcy that he had virtually no intention of keeping these hospitals open and continuing to serve the poor (the former owners)", said San Mateo County supervisor David Canepa, whose district includes the location of one of the hospitals.
Verity's six hospitals, which are predominantly low-income communities and employ more than 6,000 people, include four locations in the Bay Area and two in Los Angeles County.
Union and hospitals said in a news release that their assets remain open during bankruptcy while updates to its digital health records are being shelved, Politico  told David Miller, an official at SEIU-UHW, a union , who represents some hospital workers, called the step to bankruptcy a "destructive approach" and said other ways could have gone.
Verity secured a $ 185 million loan while seeking potential buyers, Reuters reported. This process will be monitored by a bankruptcy court and approved by the regulatory authorities.
Adcock told Reuters he expects the buyout process to take years.