In a letter to employees, Motion Picture and Television Fund CEO Bob Beitcher seemed to acknowledge that a deal with Providence Health & Services had collapsed.

But he reassured the staff that a plan was in place to keep the facility operating.

We are not yet ready to present the new program to you as legal discussions are ongoing, and all we can do at this point is ask you to take a deep breath, continue to focus on the day-to-day activities that you all do so spectacularly well, and extend us a little of your trust and confidence that the outcome will be positive for you, the industry members we serve in so many capacities, and the charitable mission of the MPTF, Beitcher wrote to employees.

However, he also said that plans to remodel the Hollywood home for the aged have been pushed back. Originally scheduled to begin this month, Beitcher now says they will start in November, with construction completed by the first quarter of 2012.

The deal between the MPTF and Providence Health & Services to keep the organization's long-term care facilities open quietly collapsed over the summer, and just came to light on Thursday.

MPTF, however, has launched discussions with other potential partners and believes an agreement to turn over operations to another health-care provider could be close, an individual with knowledge of the situation told TheWrap.

Among the reasons that talks ended were concerns over the MPTF's commitment to prioritizing admission for industry members and worries about the overall economics of taking over the money-losing hospital, the individual told TheWrap.

A spokesperson for the MPTF declined to comment specifically about the status of the Providence deal, other than to say that the organization was on course to finding a long-term solution.

A spokesperson for Providence declined to comment and referred all inquiries to the MPTF.

In February, the MPTF announced that it had entered into a non-binding letter of intent with Providence, that would transfer administration of its longterm care facility and acute care hospital to the health-care provider. Under the terms of the proposed agreement, Providence would sign a long-term lease for the MPTF hospital facilities, and state licenses for the 250-bed hospital would be transferred to nearby Providence Tarzana Medical Center.

The move was seen as a victory for Saving the Lives of Our Own, the grassroots organization that had vehemently protested plans to shutter the facility after the MPTF announced that it would close the hospital in 2009. At the time, the MPTF administration said that it was losing money at a rate of roughly $10 million a year.

This week, many of the grassroots activists and family members were disappointed, even angry that a deal with Providence will not take place.

I feel that we are being played, big time, Richard Stellar, whose mother lived at the facility, told TheWrap.

Katzenberg at one point said that they had given themselves an 'F.' They are giving the motion picture and television elderly an 'F-U.'

Yet Nancy Biederman, the co-founder of Saving the Lives of Our Own, expressed optimism that a deal would be reached.

We are pleased to see MPTF is unwaveringly focused on its commitment to long term care, Biederman said.

Deadline first reported that talks had collapsed.

Hollywood Los Angeles Hollywood Hollywood