Pacifica of the Valley Corporation

Case No. 26-11060 · Delaware · Petition Date Jul 4, 2026

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Pacifica of the Valley Corporation Bankruptcy Case

Pacifica of the Valley Corporation

Case No. 26-11060 · Delaware · Petition Date Jul 4, 2026

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Pacifica of the Valley is operating in Chapter 11 under interim cash-collateral authority, without an approved debtor-in-possession loan or a disclosed sale or plan path. The current authority is budget-bound and expires July 24, leaving continued hospital operations dependent on further court approval at a July 23 hearing and, ultimately, an August 7 final hearing under the interim cash-collateral orderDkt. 57.

The hospital operator filed on July 4 after sustained liquidity and balance-sheet pressure. Pacifica relies heavily on Medi-Cal, which accounts for 81% of its patients and 85% of revenue, while absorbing COVID-era costs, a 2024 cyberattack, approximately $9 million of seismic-retrofit fines, roughly $9.5 million of unpaid rent and about $7.5 million owed to L.A. Care. Its capital structure includes a $35 million Main Street Priority Loan, and the debtor disputes Axios Capital Solutions' asserted assignment of that debt, adding a contested secured-creditor issue to the restructuring described in the first-day declarationDkt. 16. Pacifica commenced the case as a health care debtor operating a 231-bed acute-care hospital and a 98-bed skilled-nursing facility with 697 employees, most covered by collective bargaining agreements.

The first-day strategy has centered on preserving patient services and payroll while the debtor stabilizes liquidity. The court authorized cash-collateral use through July 24, subject to a budget, weekly variance reporting, a 20% aggregate cumulative cap on negative operating-disbursement variance and CRO approval of expenditures; secured parties received replacement liens and section 507(b) superpriority claims to the extent of diminution in value. The sets the further interim hearing for July 23 at 11:00 a.m. ET, while final hearings on cash collateral and other operational relief are scheduled for August 7 at 10:00 a.m. ET. The sets the section 341 meeting for August 11 at 2:00 p.m. ET.

Updated Jul 17, 7:02 AM ET

Latest development

HearingsJuly 8, 2026

Axios challenges Pacifica’s bankruptcy authority and cash collateral access

Axios Capital Solutions challenged Pacifica’s authority to commence Chapter 11 and said it intends to seek dismissal, putting the hospital’s bankruptcy protection at risk days after the July 4 petition. In its limited cash-collateral objection, Axios asserted that an irrevocable proxy and security arrangements had transferred filing authority from management to special monitor Westwood Healthcare Partners before the petition. The court has not adjudicated that dispute.

Axios claims at least $50.9 million plus interest, fees and penalties, secured by substantially all Pacifica assets and 100% of its equity. Because patient care remains at stake, Axios conditionally consented to two weeks of cash-collateral use for operating expenses, but opposed using its collateral to pay professional fees and withheld consent to final relief. The limited runway makes the authority dispute immediately consequential: Pacifica must preserve operating liquidity while defending the validity of the case and negotiating longer-term access to its principal lender’s collateral.