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A Southern California hospital with one of the busiest trauma centers in Los Angeles will hit the bankruptcy auction block again after a proposed buyer failed to close on its previous sale, WSJ Pro Bankruptcy reported. Verity Health System of California Inc.’s 384-bed St. Francis Medical Center in Lynwood, Calif., is again up for sale after Verity terminated an earlier deal to sell the hospital to the proposed purchaser, a California-based for-profit health-care company. Bankruptcy Judge Ernest Robles in Los Angeles approved the auction procedures for St. Francis following a hearing on Wednesday. Verity Health is putting St. Francis up for sale without a stalking horse, or lead bidder, to set a floor price for the hospital. Bids are due April 3 and an auction, if necessary, will be held on April 7. Judge Robles scheduled a hearing for April 9 to consider approval of a sale. Read more. 

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Drugmaker Mallinckrodt PLC is finalizing a settlement proposal worth at least $1.6 billion that would place its U.S. generic-drug business into bankruptcy to address coming debt maturities and liabilities stemming from the opioid crisis, WSJ Pro Bankruptcy reported. The Ireland-based drugmaker is close to a proposed deal that includes a chapter 11 filing covering its U.S. generics business and a resolution of claims from hundreds of state and local governments stemming from the cost of combating opioid addiction. The settlement offers $1.6 billion to state and local governments over eight years and warrants to buy an equity stake in Mallinckrodt. The proposal, which would also require court approval, could be announced as soon as today. Mallinckrodt, one of the largest opioid makers in the U.S., previously acknowledged the risk of a bankruptcy over allegations it and other drugmakers misrepresented the health risks associated with the powerful painkillers they made.

The defunct Hahnemann University Hospital has agreed to provide insurance for hundreds of new doctors displaced by the historic Philadelphia institution’s bankruptcy, WSJ Pro Bankruptcy reported. The hospital and its insurance company — also controlled by Joel Freedman, the investment banker who led the group that acquired Hahnemann in early 2018 — will cover a gap that had threatened the professional futures of residents and fellows who were in training at the hospital when it closed down last year. Hahnemann will pay about two-thirds of the $9 million cost of the insurance, and Freedman’s affiliated insurance company will pay for the rest, according to a Thursday court filing. The agreement ends months of uncertainty for hundreds of new doctors, who were trying to find a way to cover insurance premiums as high as $95,000 to protect against lawsuits that might not be filed for years, stemming from their work at Hahnemann. More than 900 doctors were in danger of having their professional credentials tarnished if they couldn’t find replacement insurance. The offer from Hahnemann and its owners to provide insurance came after months of talks spurred by a threat from Judge Kevin Gross to oust the hospital company’s management from control, and put a trustee in charge of Hahnemann’s bankruptcy.