Verity: Lead bid for St. Vincent Medical Center called into question

By Caroline Salls

Pittsburgh, April 13 – Verity Health System of California, Inc.’s proposed $135 million sale of St. Vincent Medical Center was questioned in a Monday news release from the AIDS Healthcare Foundation (AHF).

AHF said it was “questioning problematic elements of a high-profile bankruptcy court bid to purchase L.A.’s shuttered 381-bed St. Vincent Medical Center to repurpose as a treatment center for Covid-19 patients.”

“AHF is urging the court to reconsider the leading bid and also consider alternative nonprofit proposals and offers that do not involve the same problems and conflicts associated with the lead bidder,” AHF said in the release.

Specifically, AHF said the leading bidder for St. Vincent is also a leading creditor in Verity’s Chapter 11 case, which is pending in the U.S. Bankruptcy Court for the Central District of California. AHF said a $135 million bid that may result in $66 million award back as a creditor can be seen as a bid of $69 million.

AHF said that is far less than its initial $85 million offer for St. Vincent.

According to the release, AHF made its initial all-cash offer for the hospital in March, with plans to use it as a Covid-19 care facility. It later partnered with New Commune LLC and increased its offer to submit a formal bid for consideration to $120 million.

However, with an offer of $135 million, AHF said a foundation led by Los Angeles Times’ owner Patrick Soon-Shiong and his wife, Michele B. Chan, is the stalking horse bidder for the hospital. AHF said it declined opportunities from the court to further increase its offers to bid.

AHF said California Attorney General Xavier Becerra has now challenged elements of the Soon-Shiong/Chan foundation’s bid “over concerns about the possibility of self-dealing.”

AHF said it is urging the court to reevaluate the bid from the Soon-Shiong/Chan foundation, as well as Soon-Shiong’s subsequent offer to purchase the facility outright with his own personal funds.

“Bottom line: There are alternative nonprofit offers and proposals out there for St. Vincent’s transition to a much needed Covid-19 facility that do not involve the same problems and conflicts raised by the leading bidder,” AHF said in the release.

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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