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Advancing Pathway to Implement Strategic Transactions

At Prospect Medical Holdings, we are proud of the success we’ve achieved through our collaborative model that has enabled us to forge strong partnerships among physicians, hospitals, and other providers, resulting in a coordinated and personalized care experience for our patients.

As we’ve continued to uphold our longstanding commitment to offer the highest quality and affordable care to achieve the best possible outcomes for the patients and communities we serve, Prospect Holdings has also faced a number of recent challenges.

To address these headwinds, Prospect Holdings has implemented operational initiatives, including pursuing an agreement to sell the Roger Williams Medical Center and Our Lady of Fatima Medical Center in Rhode Island, continuing to engage with key stakeholders outside of Rhode Island, and working with the Commonwealth of Pennsylvania to agree on terms for the divestiture of the Crozer-Chester Medical Center.

Prospect Holdings remains committed to providing vital care to underserved communities, and promoting patient and physician continuity.

Path Forward

To effectuate the paths forward and ensure continued provision of critical and tailored healthcare, Prospect Holdings and certain of its subsidiaries initiated voluntary chapter 11 proceedings in the United States Bankruptcy Court for the Northern District of Texas.

Chapter 11 is a legal tool that enables companies to restructure their finances or implement agreements while strengthening operations for long-term success. It does not mean that facilities are going out of business. Rather, Prospect Holdings is utilizing the chapter 11 process to facilitate the strategic transactions and sales as expeditiously as possible.

The chapter 11 proceedings do not include PHP Holdings and its subsidiaries, including Prospect Health Plan, Inc., Prospect Medical Systems, LLC and its affiliated medical groups in California, Arizona, and Texas, Gateway Medical Center, and Foothill Regional Medical Center. Their sale to Astrana Health, Inc. is still expected close in mid-2025.

Continuing to Provide Critical Medical Care to Patients

During the chapter 11 proceedings, Prospect Holdings’ hospitals, medical centers, and physicians’ offices will remain open, and patient care and services will continue uninterrupted. Prospect Holdings was granted interim approval by the Bankruptcy Court to access new money term loans in an aggregate principal amount of up to $100 million, of which $29 million is available immediately, in debtor-in-possession financing from JMB Capital Partners Lending, LLC. The Bankruptcy Court also granted Prospect Holdings interim approval to obtain a revolving credit facility provided by eCapital Healthcare Corp. in an aggregate principal amount of up to $90 million. This financing, together with cash generated from Prospect Holdings’ ongoing operations, is expected to provide sufficient liquidity to support Prospect Holdings while it works to complete the chapter 11 process, including paying employee wages and benefits without interruption. Prospect Holdings also intends to pay vendors in full under normal terms for goods and services provided after the filing date.

Prospect Holdings strongly believes that the actions it is taking represent an important step forward in its longstanding commitment to best serve the interests of its patients, physicians, employees, and communities.

Prospect HOLDINGS expects to continue:

  • Delivering quality and compassionate care to patients
  • Paying employees and providing benefits as usual
  • Paying our vendors on normal terms for goods delivered and services provided after the filing date

Update Regarding CharterCARE Health Partners

On February 2, 2025, Prospect Holdings announced that it has entered into an amended and restated asset purchase agreement to sell CharterCARE Health Partners, including the Roger Williams Medical Center, Our Lady of Fatima Medical Center, and the remainder of its coordinated health care network, to The Centurion Foundation, Inc. and other nonprofit corporations. The sale and APA are subject to approval by the Bankruptcy Court and satisfying customary closing conditions. Prospect Holdings will seek Bankruptcy Court approval of the sale and APA at a hearing currently scheduled to occur on February 12, 2025. The parties intend to close the sale shortly thereafter.

Frequently Asked Questions

Press Releases

February 3, 2025
Prospect Medical Holdings, Inc. Enters Into Agreement to Sell CharterCARE Health Partners to The Centurion Foundation, Inc.
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January 31, 2025
Prospect Medical Holdings, Inc. to Sell Crozer Health Assets to Not-For-Profit Consortium
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January 15, 2025
Prospect Medical Holdings, Inc. Receives Court Approval of “First Day” Motions
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January 11, 2025
Prospect Medical Holdings, Inc. Advances Strategic Pathway to Realign Organizational Focus
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Court filings and other information related to the proceedings are available on a separate website administered by the Company’s claims agent, Omni Agent Solutions, at https://omniagentsolutions.com/Prospect.

If you have further questions, you can contact Omni representatives:

By phone: Toll-free at (888) 550-3239 or at (818) 510-3746 for calls originating outside of the U.S. or Canada.

By email: ProspectInquiries@OmniAgnt.com

Meaghan Repko / Michael Freitag / Richard M. Goldman
Joele Frank, Wilkinson Brimmer Katcher
PMHMedia@joelefrank.com
212-355-4449