Here’s a revised and structured reference for Prospect Medical Holdings’ Chapter 11 bankruptcy filing:
Prospect Medical Holdings Files for Chapter 11 Bankruptcy, Plans Realignment
Prospect Medical Holdings, a Los Angeles-based comprehensive healthcare network, filed for Chapter 11 bankruptcy late Saturday, alongside approximately 60 subsidiaries.
Organizational Realignment and Asset Sales
The company announced plans to realign its organizational focus outside California. Pending court approval, Prospect intends to sell the Roger Williams Medical Center and Our Lady of Fatima Medical Center in Rhode Island. Discussions are ongoing with stakeholders in Pennsylvania and the Commonwealth to sell the Crozer-Chester Medical Center.
Financial and Legal Challenges
Prospect Medical Holdings reported liabilities and assets valued between $1 billion to $10 billion, with over 100,000 creditors. While the company cites “a recent number of challenges,” specific details are expected to emerge in First Day Motions filed with the court.
In October, the Pennsylvania Attorney General filed a lawsuit against the company, alleging mismanagement of the Pennsylvania-based Crozer Health System. The lawsuit accuses Prospect of violating a 2016 Asset Purchase Agreement by cutting services, closing facilities, and diverting funds to private shareholders instead of maintaining the healthcare network.
Impact on Operations and Stakeholders
Despite the bankruptcy filing, Prospect assured that all hospitals will remain operational and patient care will continue uninterrupted. The company is pursuing an expedited timeline for its restructuring and asset sales.
Von Crockett, Chief Executive Officer of Prospect Medical Holdings, emphasized:
“Today’s actions represent an important step forward in our longstanding commitment to best serve the interests of our patients, physicians, employees, and communities. Divesting our operations outside of California will ensure that they receive necessary financial support so that the communities that rely on those facilities will maintain continued access to highly coordinated, personalized, and critical healthcare services long into the future.”
Pending Deals and Company Profile
In November 2024, Prospect agreed to sell certain assets to Astrana Health in a $745 million deal, expected to finalize in mid-2025. These assets were excluded from the bankruptcy filing.
Founded in 1998, Prospect Medical Holdings operates 16 hospitals across four states: Southern California, Connecticut, Pennsylvania, and Rhode Island. The network also includes 166 outpatient clinics and centers, providing a broad range of healthcare services.
Next Steps
The Chapter 11 process will enable Prospect Medical Holdings to secure necessary funding and finalize restructuring plans. Stakeholders will likely gain further insights as court filings progress.
Reference News :- Multi-billion dollar healthcare network files for bankruptcy; seeks sale of Pennsylvania hospital
