Standard & Poor's has downgraded its rating on Downey (Calif.) Regional Medical Center to C from CCC and suspended the hospital's rating after the hospital filed for bankruptcy last month and failed to release financial statements for the prior three years.
Management at the 181-bed hospital told the New York-based ratings agency that financial statements for fiscal 2009 and the prior two years, would not be available until January, said Ken Gacka, a Standard & Poor's analyst. The lack of information prompted the agency to temporarily suspend the rating, which could be reinstated should the hospital release audited statements. The ratings agency also noted turnover in the hospital's top finance post.
Downey Regional filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court of the Central District of California in mid-September and cited dysfunctional financial computer systems and unfavorable insurance contracts as the cause of its financial distress.