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Randolph Health, a bankrupt single-hospital system based in Asheboro, N.C., received verbal approval from the North Carolina attorney general to join Roanoke, Va.-based American Healthcare System, Becker's Hospital Review reported. Attorney General Josh Stein gave the verbal approval of the deal at a bankruptcy hearing June 4, according to the Triad Business Journal. At the bankruptcy hearing, the judge approved Michael Miller to become interim CEO of Randolph Health. Miller has more than 30 years of experience in the health care industry. Miller will serve in the role until American Healthcare System's purchase of Randolph Health is complete. Randolph Health filed for chapter 11 bankruptcy in March 2020.

The private-equity landscape within long-term care could face additional scrutiny following the latest request from a federal lawmaker, McKnight's Long-Term Care News reported. U.S. Rep. Bill Pascrell Jr. (D-N.J.), chairman of the House Ways and Means oversight subcommittee, in a letter last week called on the Government Accountability Office to investigate the relationship between private equity investments and healthcare facilities that have closed. He also cited an increase in surprise billings, nursing home mortality rates and decreasing access to safety net hospitals and other providers as reasons for a federal probe. “These patterns demand further attention so that policymakers can protect patients and better understand the consequences to the health care delivery system,” Pascrell wrote. “Further, reports about bankruptcies or closures following PE buyouts are concerning because of their far-reaching impact on patients, families, health care workers, and communities.” Private-equity investment in nursing homes has been on the hot seat in recent months. In late March, witnesses called for more transparency and federal oversight of the issue during a House Ways and Means oversight subcommittee hearing on private-equity ownership. Pascrell specifically called on the GAO to address and determine the number of healthcare facilities or providers that have filed for bankruptcy or closed following investments from PE-firms within the last 10 to 15 years, geographic trends associated with facility bankruptcies or closures and the association between PE investment and facilities in underserved communities.

After more than a year of high-stakes negotiations with billions of dollars on the line, a bankruptcy plan for Purdue Pharma, the maker of OxyContin, cleared a major hurdle late Wednesday, NPR reported. Bankruptcy Judge Robert Drain in White Plains, N.Y., moved the controversial deal forward despite objections from dozens of state attorneys general, setting the stage for a final vote by the company's creditors expected this summer. The drugmaker filed for chapter 11 protection in 2019 facing an avalanche of lawsuits tied to its aggressive opioid sales practices. Public health experts and many government officials say the introduction of OxyContin fueled the nation's deadly opioid epidemic. This development brings members of the Sackler family, some of whom own Purdue Pharma and served on the company's board of directors, a step closer to winning immunity from future opioid lawsuits. According to legal documents filed as part of the case, that immunity would extend to dozens of family members, more than 160 financial trusts, and at least 170 companies, consultants and other entities associated with the Sacklers.

Heights Hospital in Houston filed for chapter 11 protection on June 1, according to court documents, Becker's Hospital Review reported. The hospital listed assets of $100 million to $500 million and liabilities ranging from $10 million to $50 million. The bankruptcy filing comes after the hospital closed suddenly and locked out staff in January over unpaid rent. Heights Hospital was once an acute care hospital but lately provided outpatient and specialty care. The hospital was purchased by AMD Global, a Houston-based real estate developer, in 2017, which created two companies to manage the medical center: 1917 Ashland Venture and 1917 Heights Hospital. The bankruptcy case was filed in the U.S. Bankruptcy Court for the Southern District of Texas.

Mercy Hospital and Medical Center’s new owner will invest $50 million in the next two years as it works to rebuild a facility once slated for shutdown, Bloomberg News reported. Insight, which took over June 1, will create a “comprehensive plan to increase services and meet community need,” a representative said in an email Wednesday. It will also appoint three independent community board members within 90 days and restore a full emergency department. Insight last week said it also intends to revive Mercy’s status as a teaching hospital as part of a plan to operate Mercy as a full-service hospital “through 2029 and beyond.” The survival of Chicago’s oldest hospital was by no means assured. Its troubles, including a poorer, sicker population that lacked private insurance, predated the pandemic. The higher costs and halting of more profitable elective procedures due to COVID-19 further strained U.S. hospitals and heightened the disparity between those struggling to stay solvent and larger and more affluent systems.

Avadim Health Inc., which makes topical foams, sprays and towelettes under Theraworx, Phuel and Combat One brands, filed for bankruptcy protection with secured lenders led by Hayfin Capital Management LLP positioned as the lead bidders in a sale process, WSJ Pro Bankruptcy reported. The Asheville, N.C.-based business filed for chapter 11 Monday in the U.S. Bankruptcy Court in Wilmington, Del., to sell itself after a planned public offering in early 2020 was called off. Despite quadrupling sales in recent years, Avadim never turned a profit, owes secured lenders and bondholders nearly $102 million and faces a “severe liquidity crisis,” court papers said. The leading bid from lenders would put them in control of the business in exchange for roughly $70 million in debt forgiveness. Privately held Avadim was founded in 2007 by Stephen Woody, the company’s chief executive officer and one of the largest of its 1,300 shareholders. The business does its own research and development, and makes its key products in-house in Asheville. Avadim has been trying to restructure its secured debt and to raise capital, but losses widened to $53.6 million in 2020, from $34.8 million the year before, Chief Restructuring Officer Keith Daniels said in a court filing.

The buyer of Mercy Hospital and Medical Center agreed to operate a full-service community hospital through at least 2029 and to restore services cut after the Chicago facility filed for bankruptcy in February, Bloomberg News reported. The agreement addresses community leaders’ concerns that Insight, a Michigan-based biomedical company, would close the hospital, or pare down its operations, instead of keeping it as a comprehensive facility that treats some of Chicago’s poorest and sickest patients. Insight said it’s committed to stabilizing Mercy’s finances and restoring the hospital as a teaching facility, along with periodic reporting on its progress, according to an emailed statement. It also agreed to community representation on its board, another demand from community, labor and political leaders. Mercy filed for bankruptcy in February after the state denied a plan to shutter it. Owner Trinity Health Corp. agreed to sell the facility for $1 to Insight. Insight will assume full control on June 1. Local leaders had proposed other solutions, including a sale to a partnership of Black physicians and a local hospital.