In re Gardens Regional Hospital & Medical Center, Inc.

MEMORANDUM OF DECISION FINDING THAT THE DEBTOR IS NOT REQUIRED TO OBTAIN THE CONSENT OF THE CALIFORNIA ATTORNEY GENERAL TO SELL THE ASSETS OF A CLOSED HOSPITAL

At issue is whether the Debtor, a nonprofit entity, is required to obtain the consent of the California Attorney General to sell certain assets of a closed hospital. 1 Under the relevant California statutes, a non-profit entity operating a “health facility” that wishes to sell a material amount of its assets must obtain the consent of the California Attorney General. Because a closed hospital does not qualify as a “health facility” under California law, the *823 Court finds that the Debtor is not required to obtain the California Attorney General’s consent prior to selling a material amount of its assets.

I. Facts

Gardens Regional Hospital and Medical Center, Inc. (the “Debtor”) commenced a voluntary Chapter 11 petition on June 6, 2016. As of the petition date, the Debtor operated a 137-bed acute care hospital located in Hawaiian Gardens, California (the “Hospital”). The Hospital contained an intensive care unit, a cardiac unit, and an eight-bed Emergency Department. In 2015, more than 8,500 patients visited the…