Bankrupt firm to sell hospitals. (Health Care).

PINE Grove Hospital in Canoga Park is on the auction block, and Pacifica Hospital of the Valley in Sun Valley will join it later this year.

The two hospitals are being sold by Doctors Community Healthcare Corp., the private Scottsdale, Ariz.-based company that was forced to file for bankruptcy last year shortly after the collapse of its chief lender, National Century Financial Enterprises Inc.

Pine Grove, which closed last month, is the first facility that Doctors Community plans to sell as it liquidates its hospital assets in U.S. Bankruptcy Court in Washington D.C., said Tom Barry, an investment banker with Cain Bros. in New York, who was hired to handle the sales.

The company has received several offers for the psychiatric hospital, and plans to select an initial "stalking horse" buyer in the immediate future that will be submitted to U.S. Bankruptcy Judge S. Martin Tee Jr. That buyer will set the lowest price for an auction the court will hold, with a final deal expected by June 15, Barry said.

Pine Grove has been closed since last month, the result of both the bankruptcy and a decision by Los Angeles County to bar the facility from receiving any more involuntary patients, following an investigation into a sexual assault on a patient at the hospital last year.

However, the hospital does have a license -- although it remains under suspension -- that any new buyer would seek to reactivate, Barry said.

Meanwhile, Pacifica, a 242-bed general acute care facility, continues to operate, and there are no plans for closure. A sale is expected within the year. The company's other three hospitals are in Chicago and Washington D.C.