A federal bankruptcy court judge ordered Brea (Calif.) Community Hospital to close, at least temporarily, a move that scuttled one of two bids for the facility and cast its future into doubt. Judge John Ryan's decision shut the door on Prime Healthcare Systems, Riverside, Calif., which had offered $6.5 million to acquire the 116-bed hospital on the condition that it remain open. Spectrum Medical Center Partners, Newport Beach, Calif., has offered $30 million for the hospital, nearby medical office buildings and 17 surrounding acres. But the real estate is held separately by the hospital's former owners and wresting it from them could require a long court battle. A court-appointed trustee for the hospital sued last month to reintegrate the property and subject it to creditors' claims. Brea Community filed for bankruptcy Jan. 28 with $13 million in debt.
Separately, another bankruptcy court judge approved a plan that will allow Santa Paula (Calif.) Memorial Hospital, closed since December 2003, to reopen under new ownership by year-end. Under the plan, the 49-bed hospital will be sold to the county for $2.75 million and become an arm of 153-bed Ventura County Medical Center. Sixteen acres of hospital-owned property will be sold to a residential developer for $10.6 million, with the proceeds going to pay off creditors. After 44 years in operation, Santa Paula Memorial closed and filed for Chapter 11 after its board of directors, intent on maintaining control despite mounting debt, rejected county offers to save the hospital. -- by Laura B. Benko