Prospect Medical Holdings, Inc. and its debtor affiliates have filed an emergency motion seeking approval to close several Pennsylvania hospitals by March 14, 2025, citing unsustainable financial losses and the inability to secure a buyer or operator for the facilities.
Filed on March 6 in the United States Bankruptcy Court for the Northern District of Texas (Case No. 25-80002), the motion details how the Pennsylvania hospitals have incurred EBITDA losses of approximately $91.8 million over the six months preceding the filing. The Crozer-Chester Medical Center alone reported EBITDA losses of nearly $46.9 million for the fiscal year through January 31, 2025.
According to the filing, the debtors have exhausted attempts to find alternatives to closure, including marketing efforts in 2022 and 2023 to sell the facilities. Despite negotiations with potential buyers and coordination with the Commonwealth of Pennsylvania and its Attorney General, no sustainable solution has emerged.
"This is not the outcome the Debtors hoped for—and have been working tirelessly towards—with respect to the Pennsylvania Hospitals," the motion states. "The Debtors' unequivocal goal was to avoid the closure of the Pennsylvania Hospitals and allow the facilities to continue to provide critical healthcare access to underserved populations in Pennsylvania."
The closure plan covers Crozer-Chester Medical Center, Springfield Hospital, Taylor Hospital, Delaware County Memorial Hospital, and other related facilities. The plan outlines provisions for the safe transfer and discharge of patients, protection of medical records, and proper disposition of pharmaceuticals, hazardous materials, and medical waste.
The motion indicates that the DIP budget, along with funding available under a Receiver Agreement, only provides adequate resources for operations through March 14, 2025. The debtors argue that continuing operations beyond this date "threatens to accelerate the financial deterioration of the Debtors, jeopardizing the stability of their remaining hospitals and overall operations."
The debtors are represented by Sidley Austin LLP, with attorneys Thomas R. Califano, Rakhee V. Patel, William E. Curtin, Patrick Venter, and Anne G. Wallice appearing on the filing.
A hearing on this emergency motion is scheduled for March 11, 2025, at 9:30 a.m. (Central Time) in the Dallas Division of the Northern District of Texas Bankruptcy Court.
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View the full 28-page Emergency Motion for Entry of an Order Approving the Closure of the Pennsylvania Hospitals (link to PDF)