By Dorothy Ma | Bloomberg
Prospect Medical Holdings, as soon as an lively purchaser of cash-strapped hospitals, filed for chapter after battling debt piles and hovering prices.
The corporate listed $1 billion to $10 billion in belongings and liabilities every, together with greater than 100,000 collectors, in a chapter petition filed in Texas on Saturday.
Prospect Medical, which gives companies in locations together with Southern California, Connecticut and New Jersey, has about 12,600 staff, in keeping with a courtroom doc. A majority of those staff are physicians, nurses and different health-care professionals.
In Southern California, the corporate owns Bellflower Behavioral Well being Hospital, Foothill Regional Medical Heart, Los Angeles Neighborhood Hospital, Norwalk Neighborhood Hospital, Southern California Hospital at Culver Metropolis, Southern California Hospital at Hollywood and Van Nuys Behavioral Well being Hospital.
The agency is the most recent hospital operator to stumble after a Could chapter submitting by Steward Well being Care System, which gives companies in Massachusetts. The failure prompted debate in regards to the regulation of personal equity-owned hospitals, whose failure may publish a severe risk to native communities.
There had been indicators of misery at Prospect Medical since final yr, when hospital landlord Medical Properties Belief Inc. sought to take management of among the agency’s well being care entities whereas accusing it of defaulting on debt.
Medical Properties stated Sunday its precedence shall be to guard its funding in Prospect’s California hospitals. The owner additionally expects to assist Prospect’s efforts to finish a sale of its Connecticut amenities, in keeping with a press release.
William Tong, legal professional common of Connecticut, stated in a press release that he’s “disappointed” with Prospect Medical’s determination to file for chapter and that his workplace is watching the matter intently.
Hospital gross sales
Prospect Medical stated it’ll prioritize specializing in working group hospitals in California, in a Saturday assertion. The plan consists of sale of two medical facilities in Rhode Island to Centurion Basis, it stated.
It’s additionally participating with key stakeholders to finalize essential funding for the Chapter 11 chapter course of.
The bankrupt agency listed practically $230 million in workforce obligations, together with worker compensation and advantages, a courtroom doc confirmed. It’s asking for courtroom’s approval to pay for these obligations.
The corporate has appointed Sidley Austin LLP as common chapter legal professional, Alvarez & Marsal as monetary adviser, and Houlihan Lokey Inc. as funding banker, in keeping with the courtroom doc.
The case is Prospect Medical Holdings, Inc., 25-80002, within the U.S. Chapter Court docket Northern District of Texas.
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