California-based hospital operator Prospect Medical Holdings Inc., along with several subsidiaries, filed for Chapter 11 bankruptcy in the Northern District of Texas on Saturday, listing over $1 billion in debts. The company plans to move forward with sales of several facilities while focusing on its California operations.
In a press release, the Los Angeles-based company assured that its hospitals in California, Connecticut, Pennsylvania, and Rhode Island would remain open during the restructuring process. Prospect intends to use cash flow from ongoing operations and potential financing, subject to court approval, to pay employee wages, benefits, and vendor obligations.
As part of its restructuring, Prospect is proceeding with the sale of two Rhode Island hospitals to Centurion Foundation Inc. and is working with Pennsylvania authorities to finalize the divestiture of the Crozer-Chester Medical Center near Philadelphia.
“Divesting operations outside California will ensure these facilities receive the necessary financial resources to continue providing essential healthcare services to their communities,” said CEO Von Crockett in a statement.
