St. Michael's Medical Center in Newark, N.J., accepted a $62.2 million bid from Prime Healthcare Services of California that will allow the national hospital chain to acquire the troubled facility in bankruptcy court later this week, hospital CEO David Ricci announced and NJ Advance Media reported yesterday. Prime announced its intention to buy the struggling city hospital nearly three years ago, but the required review by the state Department of Health and the Attorney General's Office remains unfinished. Hemorrhaging cash and employees, frustrated officials from the Catholic hospital filed for bankruptcy in August to expedite the sale. Prospect Medical Holdings of California offered a competing bid of $63 million to buy St. Michael's, but the hospital's board of directors determined that Prime's deal was better, Ricci said. Prime has committed to spending $50 million in capital improvements over five years — double its initial offer. Prime upped its pre-auction bid of $49 million by $13 million to recognize that St. Michael's owes the state $228 million in bonds form when it was purchased by Catholic Health East in 1998. The bank that holds the bonds, Bank of New York Mellon, filed an objection to the sale that said that any bid less than $60 million would be unacceptable, said Michael Sirota, St. Michael's attorney. The remaining $170 million will be borne by taxpayers via the N.J. Health Care Facilities Financing Authority, which loaned the money.
