Los Angeles-based Prospect Medical Holdings, a private equity-backed system that owns hospitals across four states, has filed for Chapter 11 protection.
Here are five things to know about the bankruptcy:
1. Prospect initiated voluntary Chapter 11 proceedings as it works to sell 10 of its 16 hospitals, according to a Jan. 11 news release. All facilities will remain open and patient care will be uninterrupted during the Chapter 11 process. The system also said it will prioritize operating community hospitals in California as it realigns its focus outside of the state.
2. The system operates seven hospitals in California, four in Pennsylvania, three in Connecticut and two in Rhode Island. Prospect is also the parent company of Bloomfield, N.J.-based CHA Partners and Upland, Pa.-based Crozer Health, which own and operate ASCs under Prospect.
3. "Today’s actions represent an important step forward in our longstanding commitment to best serve the interests of our patients, physicians, employees, and communities," Prospect CEO Von Crockett said in the release. "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."
4. Prospect is working to sell two Rhode Island hospitals — Our Lady of Fatima Hospital in North Providence and Roger Williams Medical Center in Providence — to Atlanta-based Centurion Foundation. The system is working to finalize the terms for the sale of Crozer-Chester Medical Center in Upland, Pa. Yale New Haven (Conn.) Health was planning to buy Prospects three hospitals in the state for $435 million but filed a lawsuit in May 2024 seeking to exit the deal, citing facility mismanagement.
5. Prospect's PHP Holdings and its subsidiaries, including Prospect Health Plan, Prospect Medical Systems and Tustin, Calif.-based Foothill Regional Medical Center, are not part of the Chapter 11 proceedings. These entities are expected to be sold to Alhambra, Calif.-based Astana Health in mid-2025.