Westside Hospital Faces Closure

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Century City Doctors Hospital, a troubled West L.A. boutique hospital, filed for Chapter 7 bankruptcy on Friday and said it likely would have to close its doors within a week unless a buyer is found.

The 176-bed hospital, which had been open less than three years, closed its emergency department at noon Friday, cancelled all elective surgeries, and intends to transport patients to nearby hospitals over the next seven to 10 days. About 250 of the hospital’s 425 staff were laid off, with most of the remainder expected to stay on during the transition.

The hospital, which had been struggling to pay off more than $60 million debt, had been talking to a potential buyer but was unable to finalize a deal before its lender, Fortress Investment Group, cut off its line of credit, according to sources.

Sources suggested that if a deal could be struck in the coming week, Doctors would convert its Chapter 7 filing to a Chapter 11 reorganization.

But the list of potential suitors is likely to be a short one. “There are few organizations with the kind of capital needed for that kind of purchase that would be interested in entering the Los Angeles market right now because of the financial stresses facing hospitals here,” said Jim Lott, spokesman for the Hospital Association of Southern California, adding that he was not privy to the negotiations taking place at Doctors.

The former Tenet Health Corp. facility was acquired by a physician investor group lead by Salus Surgical Group in the spring of 2004 and reopened under the Century City Doctors Hospital name in October 2005.

The group invested about $100 million to renovate the facility, which features hotel-like amenities, including private suites with large flat-screen televisions, and hospital food service run by celebrity chef Wolfgang Puck.

Pat Wolfram, the hospital’s interim chief executive, said the hospital had been struggling to keep up its patient load and both pay off debt from the renovation and cover operating costs.

Doctors “has been faced with substantially higher costs than projected to build our facility, delays in (fully) opening the hospital, which put a drain on working capital, problems with our operating systems and most significantly a longer-than-expected time frame to reach a viable census level,” Wolfram said in a statement.

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