Adventist Health closed a deal Monday to take over the formerly bankrupt Sierra Kings Heath Care District’s Central California clinics and hospital.
In June, district voters overwhelmingly approved a proposed sale to Adventist, a faith-based nonprofit based in Roseville with 17 hospitals and more than 100 clinics.
The small public hospital district, comprised of a hospital and five clinics in Reedley and located in the Central Valley near Fresno, asked voters to allow it to lease its facilities and sell other assets to Adventist, which would take over operations.
The district filed for bankruptcy in October 2009 after discovering management had spent $1.7 million of bond funds on operating expenses and had misspent other funds.
The district uses property taxes to pay for voter-approved general obligation bonds.
Sierra Kings had $34 million of outstanding debt as of June 30.
As part of the deal, the district will retire $7.5 million of revenue bonds.
The U.S. Bankruptcy Court for the Eastern District of California has already protected the district’s GO bonds from the bankruptcy process.