MODESTO, Calif. — When American Advanced Management made a bid for the bankrupt Madera Community Hospital last year, many local officials and others involved in trying to reopen the facility didn’t take the company seriously.

The 11-year-old firm, based in Modesto, was already running a handful of small, rural hospitals, but Madera had far larger and more prestigious suitors, including Trinity Health and then Adventist Health.

After those two entities had backed out, the bankruptcy judge tentatively greenlighted the AAM proposal. But a nonprofit community group later objected in a court filing, citing concerns about AAM’s commitment to fully reopen the hospital and airing allegations of “dishonesty, fraud, perjury, and maladministration.”

The Madera Coalition for Community Justice and other critics of the AAM deal hoped that Adventist and the University of California-San Francisco, which made a last-minute joint proposal in February to take over the hospital, might get another look.

But Gov. Gavin Newsom all but ended the drama on April 8 by announcing the state had approved the AAM plan and would provide a $57 million loan from a fund for distressed hospitals to help reopen and operate the Madera facility.

The same day, AAM, along with the Madera hospital and its creditors, asked the court to strike MCCJ’s objection from the record and requested an April 11 hearing for the judge to consider the motion. MCCJ pushed back with its own filing objecting to the request.

The closure of the hospital in January 2023 left Madera County, home to 160,000 people, largely Hispanic agricultural workers, without a general acute care facility. Like many rural hospitals in California and around the country, the Madera hospital had suffered financial and demographic challenges, including a large proportion of patients on low-paying government insurance programs, low patient volumes, and difficulty attracting talent, in addition to pandemic-related pressures.

AAM has committed to pay up to $30 million to creditors and reopen the hospital as soon as late summer. The company has a portfolio of nine hospitals, many of them in underserved regions of California.

“American Advanced Management has a proven track record of reopening closed hospitals in California and saving others from the brink of closure,” said Matthew Beehler, the company’s chief strategy officer.

It remains uncertain whether AAM can make the Madera hospital financially viable. Reopening alone will cost millions, and many of the same constraints that led to the bankruptcy remain. In its final two years of operations, the Madera hospital lost $14 million.

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