Not Healthy. (Wall Street West).

The health care sector generally is not in the throes of debt-induced financial restructuring, but Brentwood-based Barrington Associates has found itself helping out Maxicare Health Plans, or at least what was left of it.

Those with long memories will remember that back in the 1980s, publicly held Maxicare went on a debt-financed national acquisition binge, becoming one of the nation's largest health maintenance organizations under the direction of Chairman and Chief Executive Fred Wasserman. But like so many roll-ups, some of what was acquired had been booby-trapped by bad record-keeping, or overstated profits. The debt wolves, however, care little for excuses, and Maxicare declared Chapter 11 bankruptcy protection in 1990.

Maxicare emerged from bankruptcy, again became publicly traded, but seemed to struggle for survival with each year. Its business plan involved shedding assets, a strategy pursued through a successive series of managers. By last year, Maxicare had fewer than 500,000 members, down from the 17 million in its heyday.

But all for naught. Maxicare again declared Chapter 11 late last year. Barrington was brought into maximize remaining value by negotiating the sale of Maxicare's California state Medicaid plans to two other buyers under the direction of Wendelin Maners, Barrington vice president and director of healthcare investment banking.

Contributing columnist Benjamin Mark Cole writes about the local investment community for the Los Angeles Business Journal. His new book is "The Pied Pipers of Wall Street: How Analysts Sell You Down the River," published by Bloomberg Press.