Charter auction approved; multiple buyers break up chain.(Brief Article)

Publication: Mental Health Weekly

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COPYRIGHT 2001 Manisses Communications Group, Inc.

It's now official: Charter Behavioral Health Systems, the once-dominant psychiatric hospital chain, will be sold in piecemeal fashion to multiple buyers in markets across the country.

Charter filed for bankruptcy under a voluntary Chapter 11 reorganization in February, following the closure of 51 hospitals over a six-month period (see MHW, Feb. 14 and Feb. 21). The hospital chain struggled financially since a 1997 deal in which Magellan Health Services Inc. sold the chain's facilities to Crescent Real Estate Equities Inc. for $400 million and entered a co-ownership arrangement of Charter operations with Crescent Operating Inc.

The hospital chain in 1994 owned 105 psychiatric facilities in the United States and Europe. It began 2000 with 77 U.S. facilities, of which 40 were slated for sale as part of an unsuccessful restructuring strategy. Once Charter filed for bankruptcy, its...

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