September 30, 2022

AG Bonta Conditionally Approves Nonprofit Retirement Communities Transaction

Lori Kalani, Bernard Nash

Cozen O'Connor

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Cozen O'Connor

California AG Rob Bonta has conditionally approved the sale of California-Nevada Methodist Homes (Methodist)—a nonprofit that operates two continuing care retirement communities—to real estate firm Pacifica Companies LLC (Pacifica). The $34 million sale is part of Methodist’s Chapter 11 bankruptcy proceedings and has already been approved by the Bankruptcy Court.
Under California law, sale or transfer of a nonprofit healthcare facility requires approval of the state AG. AG Bonta’s made his approval contingent on a number of conditions relating to both facilities, citing Pacifica’s higher than average rate of citations for similar facilities it already owns, which conditions include requiring Pacifica to consult a Community Advisory Board; mandating reporting on safety; and requiring continued participation in Medicare.
Both facilities will also be required to maintain their current staffing and care delivery levels, and authorize the appointment of a monitor by the AG to evaluate and audit compliance with standards of care, along with other forms of compliance reporting.

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