A New York-based hedge fund has agreed to bail out a financially troubled chain of nonprofit Catholic hospitals in California under a 15-year agreement.
The Daughters of Charity Health System announced Monday that BlueMountain Capital Management will contribute up to $260 million as part of a new Verity Health System.
Under the terms of the transfer, BlueMountain will operate Verity as a nonprofit, not-religious hospital for at least three years before exercising its option to purchase the system and turn it into for-profit centers.
The six hospitals, all in California, serve low-income patients in the San Francisco Bay and Los Angeles areas. The Bay Area hospitals are O'Connor Hospital in San Jose, Saint Louise Regional Hospital in Gilroy and Seton Medical Center in Daly City. There has been much angst that new owners might close the hospitals or abandon the system's charitable work.
By law, the attorney general's office must approve such transfers.