Verity Health System of California, Inc.

I. Facts

On August 31, 2018 (the “Petition Date”), Verity Health System of California (“VHS”) and certain of its subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. The Debtors’ cases are being jointly administered. As of the Petition Date, the Debtors operated six acute care hospitals in the state of California. On December 27, 2018, the Court authorized the Debtors to sell two of their hospitals—O’Connor Hospital and Saint Louise Regional Hospital—to Santa Clara County (the “Santa Clara Sale”).2 The Santa Clara Sale closed on February 28, 2019. On February 19, 2019, the Court entered an order establishing bidding procedures (the “Bidding Procedures Order”)3 for the auction of the Debtors’ four remaining hospitals—St. Francis Medical Center (“St. Francis”), St. Vincent Medical Center (including St. Vincent Dialysis Center) (“St. Vincent”), Seton Medical Center (“Seton”), and Seton Medical Center Coastside (“Seton Coastside”) (collectively, the “Hospitals”). Under the Bidding Procedures Order, Strategic Global Management (“SGM”) was designated as the stalking horse bidder.

1 In addition to the oral…