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Health-care company Strategic Global Management Inc. said it would pay $50 million in cash for two bankrupt Bay Area hospitals owned by Verity Health System of California Inc. but is being blocked by the owner from bidding on the properties, WSJ Pro Bankruptcy reported. SGM, a California-based for-profit health-care company owned by orthopedic surgeon and real-estate investor Dr. Kali Pradip Chaudhuri, said an affiliate has made a written offer to Verity for the 357-bed Seton Medical Center in Daly City, Calif., south of San Francisco.The $50 million offer doesn’t include accounts receivable or additional revenue, which SGM estimates at another $30 million. But SGM said that the efforts to participate in the process have been “blocked” by Verity, according to papers filed on Monday in U.S. Bankruptcy Court in Los Angeles. A Verity representative couldn’t immediately be reached for comment. The $50 million bid also includes the 116-bed Seton Coastside, in Moss Beach, Calif. SGM’s renewed interest in Seton Medical comes as California prepares to take dramatic steps to slow the spread of the novel coronavirus. Some 6.7 million people in the Bay Area have been ordered to stay at home for three weeks except for essential needs, authorities said Monday. The legal order includes San Mateo County, where the Seton medical facilities are located.

The Federal Bureau of Investigation raided a health care business linked to Joe Biden’s brother in late January, seizing boxes of documents, Politico reported. The raid of an Americore Health hospital represented a deepening of the legal morass surrounding James Biden’s recent venture into health care investing at a time when questions about the business dealings of Joe Biden’s relatives, and their alleged connection to the former vice president’s public service, continue to dog his presidential campaign. In the weeks since the raid, two small medical firms that did business with James Biden have claimed in civil court proceedings to have obtained evidence that he may have fraudulently transferred funds from Americore “outside of the ordinary course of business,” and a former Americore executive has told Politico that James Biden had more than half a million dollars transferred to him from the firm as a personal loan that has not yet been repaid. Tom Pritchard, a former Americore executive familiar with the business' finances, told Politico that James Biden’s arrival exacerbated Americore’s financial problems. Holding out the promise of a large investment from the Middle East based on his political connections, James Biden introduced Americore’s founder to his older brother and helped land a bridge loan to Americore from a hedge fund, Pritchard said. Meanwhile, Americore found itself increasingly hamstrung by high-interest loans and unable to pay employees and vendors, a situation that disrupted the operations of the rural hospitals it owns. Now, the business is in bankruptcy court.

State legislators in California are calling on El Segundo, Calif.-based Verity Health to reverse its decision to close Seton Medical Center in Daly City, Calif., Becker's Hospital Review reported. Verity entered chapter 11 bankruptcy in August 2018. In January, the health system closed St. Vincent Medical Center, a 366-bed hospital in Los Angeles, after a deal to sell four of its hospitals fell through. Now, Verity is reportedly planning to shut down its hospital in Daly City. San Mateo County Supervisor David Canepa told a crowd at a community meeting March 4 that Verity is expected to shut down Seton Medical Center as soon as this week. A group of legislators is requesting Verity keep the hospital open, arguing that closing the facility would make it more difficult to treat future cases of the novel coronavirus.

Randolph Health announced that it has filed for chapter 11 protection on Friday, MyFox8.com reported. Randolph Health will be continuing to operate under normal course of business during this process. Patients will still be able to access their health care providers and services with no interruption, Randolph Health says. Employees also should not miss any paychecks and will continue to receive benefits. “Over the past three years, we have undertaken significant efforts to strengthen financial operations, identify a long-term path forward and ultimately protect Randolph County’s health care future,” said Angela Orth, CEO of Randolph Health. Orth says she expects the process to be completed this year.

Health-care company Strategic Global Management Inc., which failed in an earlier bid to purchase a number of Verity Health System of California Inc.’s hospitals out of bankruptcy, wants to buy two of the system’s Bay Area hospitals for $60 million, WSJ Pro Bankruptcy reported. SGM, a California-based for-profit health-care company, said it has presented a written offer to Verity for the purchase of the 357-bed Seton Medical Center in Daly City, Calif., south of San Francisco, according to papers filed Wednesday in U.S. Bankruptcy Court in Los Angeles. The $60 million bid also includes the 116-bed Seton Coastside, in Moss Beach, Calif. SGM had previously bid $610 million for the two hospitals along with the Los Angeles-area St. Francis Medical Center and St. Vincent Medical Center. Verity terminated the purchase late last year after saying SGM was unable to close the deal. SGM said in court papers that it “can verify that, for purposes of the acquisition of Seton, it has the ability to obtain the cash necessary to close the sale” within 45 days either through a private sale or through an auction process. In either case, SGM said it will be a competitive bidder.

Melinta Therapeutics, Inc., a commercial-stage company focused on the development and commercialization of novel antibiotics to treat serious bacterial infections, confirmed that Deerfield Management Company, L.P., the lenders under the company’s senior credit facility, has been designated as the highest and best offer for the company and its assets following the completion of a formal marketing process, according to a press release. The auction scheduled for March 6, 2020 will not proceed, as no party submitted a higher and better bid in accordance with the bidding procedures established by the U.S. Bankruptcy Court for the District of Delaware. Under the terms of the previously announced restructuring support agreement, Deerfield will acquire the company as a going concern by exchanging its secured claims arising under its senior credit facility for 100 percent of the equity to be issued by the reorganized Melinta pursuant to a pre-negotiated chapter 11 plan of reorganization. Melinta will seek court approval to assume its agreement with Deerfield on March 13, 2020, and expects that the chapter 11 plan implementing the Deerfield transaction will be confirmed by the court on April 2, 2020.

Officials with St. Alexius Hospital are exploring whether to put its Jefferson campus on the market in a bid to pay down debts related to its chapter 11 bankruptcy, the St. Louis Business Journal reported. The sale would include the property at Jefferson Avenue and Miami Street in Gravois Park, as well as its bariatric center at 1400 Lemay Ferry Road in south St. Louis County. Both properties are vacant. The sale would not include the hospital's main campus on South Broadway. It's also not likely to include the Lutheran School of Nursing property, which sits adjacent to the Jefferson campus hospital, sources said. St. Alexius' new CEO, Dr. Sonny Saggar, would not confirm the possible sale but said hospital officials are "considering all options." Saggar, who founded urgent care clinics in downtown St. Louis and Creve Coeur, was appointed CEO of St. Alexius about two weeks ago, after having served as its emergency room director. A bankruptcy judge on Feb. 20 appointed Carol Fox, principal with GlassRatner, a financial advisory services and consulting firm in Florida, to be trustee for the hospital's parent company, Americore. That followed word from an official in the case that Americore's then-CEO, Grant White, was under criminal and civil investigation and could not properly manage St. Alexius and other facilities. The judge removed White as CEO. Read more. (Subscription required.) 

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