Bankrupt hospital operator Verity Health System of California Inc. got access to a $185 million loan that company representatives said will keep their six struggling facilities open until they find buyers to take over the operations, WSJ Pro Bankruptcy reported. Bankruptcy Judge Ernest Robles on Wednesday approved the nonprofit health care provider to spend the full amount of the loan extended by Ally Bank. The company, which employs roughly 7,400 people, filed for bankruptcy on Aug. 31, saying it doesn’t have enough money to upgrade its record-keeping system and buy more than $100 million of necessary medical equipment. The loan approval came despite protests from lawyers who represent a group of bondholders owed $461 million, who argued that Verity Health System officials rejected a cheaper borrowing deal they had offered. Bondholders also worried that the fine print of the bankruptcy loan would make it harder for them to get money from the planned sale of the hospitals.
