Judge Laura Taylor, San Diego County U.S. Bankruptcy Court, has approved DAP Health’s bid to acquire substantially all the assets of Borrego Health.

This follows the Feb. 15, 2023, announcement that the Borrego Health Board of Trustees had selected DAP Health’s $50 million offer as the winning bid.

Along with DAP Health, Innercare, a private nonprofit, operating health care centers, dental clinics and Women, Infant, and Children Programs in Imperial and Riverside counties; and Neighborhood Healthcare, which operates health centers in San Diego and Riverside counties, will also provide operational and administrative support to the former Borrego clinics.

The next step, according to a DAP Health press release is, “finalizing the transactions for the sale to receive regulatory approval from the Health Resources and Services Administration (HRSA).”

“While that process is underway, leaders from Borrego Health, DAP Health, Innercare and Neighborhood Healthcare will begin collaborating toward their shared goal of facilitating a smooth transition that does not interrupt patient care or team members’ careers.”

Borrego Health has 18 clinics, two pharmacies and six mobile clinics in Riverside and San Diego counties, according to a Sept. 27, court filing. The organization provided approximately 386,000 patient care visits to more than 94,000 patients in 2021, according to court documents.

DAP Health, by contrast, saw more than 8,000 patients in 2021, according to a community impact report. Its main campus is located in Palm Springs, and it opened a sexual wellness clinic in Indio in July. There are currently 293 employees, according to Marketing Director Steven Henke.

Its tax filing for the year ending June 30, 2021, showed annual revenue of nearly $66 million.

According to the Chapter 11 filing, Borrego Health has between 5,001 and 10,000 creditors and owes between $50 million and $100 million. Its assets are worth between $50 million and $100 million. Borrego Health spokesperson Dan Kramer said, “Cash and any remaining assets in the estate will go to pay off the creditors pursuant to the terms of the agreement with the Department of Health Care Services (DHCS) and a plan of liquidation.”

DHCS had previously filed a lawsuit opposing Borrego Health’s bankruptcy approval by the Court. DHCS, also claimed, it was owed $60 million in Medi-Cal funds.

Borrego Health clinics remain open, and patients do not need to reschedule appointments.