DRMC may have a buyer
DOWNEY - Downey Regional Medical Center, hoping to recover from bankruptcy, has signed a non-binding letter of intent with Presbyterian Intercommunity Hospital who will acquire Downey Regional once a definitive agreement is reached.If realized, the agreement would bring together the two non-profit hospitals and allow Downey Regional to keep its doors open. Under the proposed structure, Presbyterian Intercommunity, a 400-plus bed hospital in Whittier, would form a non-profit entity to acquire the assets of Downey Regional under a plan of reorganization. The asset purchase will occur if Downey Regional agrees to make payments to general unsecured creditors according to a proposed schedule. The outstanding bonds of the 90-year-old hospital would either be guaranteed by Presbyterian Intercommunity, an appropriate affiliate, or may be assumed into the Presbyterian Intercommunity Hospital Obligated Group. "Now that the letter of intent is signed, Presbyterian Intercommunity and Downey Regional Medical Center can begin the process of creating an integrated regional healthcare system with many benefits for residents of the greater Southeast Los Angeles County region serviced by the two hospitals," said James R. West, president and CEO of Presbyterian Intercommunity Hospital. "By working with the management and physicians at Downey Regional, the two hospitals will be able to create a comprehensive network of healthcare services that will be unsurpassed in the area." Since filing for bankruptcy last September, Downey Regional has approached several interested parties concerning a potential acquisition of the hospital, but Rob Fuller, executive vice president and COO for Downey Regional, is confident that the agreement with Presbyterian Intercommunity will endure. "We are hopeful that we can quickly come to terms under a definitive asset purchase agreement with Presbyterian Intercommunity Hospital and allow for the new non-profit Downey-based hospital to commence operations as early as this summer, as previously planned," said Fuller in a released statement. "While this letter of intent is non-binding and preliminary in nature, there is a natural geographic and operational affinity between the two organizations that should allow for the Downey-based non-profit hospital to enjoy successful hospital operations from the outset once the asset purchase agreement is concluded." In February, Downey Regional Medical Center executed a letter of intent for affiliation with the Daughters of Charity Health System, but after a brief period of negotiations, Downey Regional announced last month that discussions with the Daughters of Charity Health System had ended. Despite the non-binding agreement reached by Downey Regional and Presbyterian Intercommunity, officials say the discussions between the hospitals are still ongoing. Downey Regional's president and chief executive officer, Kenneth Strople, said the plan, if achieved, could save the 199-bed hospital. "Our overall plan in these discussions is to execute a strategic transaction that allows for a Downey-based nonprofit hospital to continue providing superior healthcare services to patients in the community," said Strople.
********** Published: April 9, 2010 - Volume 8 - Issue 51