Prospect Medical Holdings has filed for Chapter 11 bankruptcy, citing over $400 million in debt and financial challenges from the pandemic and inflation
Texas: So, here’s the scoop. Prospect Medical Holdings, which runs over 182 hospitals and clinics, just filed for Chapter 11 bankruptcy. They did this in a Texas federal court on Saturday.
This Los Angeles-based company is in a tough spot. They’re saying they owe more than $400 million. A big part of their troubles comes from the pandemic, inflation, and health plans denying claims.
They’re looking to sell off some of their hospitals outside California while keeping everything running smoothly. They’ve already got plans to sell two hospitals in Rhode Island to a non-profit group.
Things got messy under their previous owner, a private equity firm. They took out a huge loan and paid themselves big dividends, which left Prospect with a mountain of debt.
There’s been some serious backlash too. A Senate report accused them of putting profits ahead of patient care. The former CEO made a hefty sum from those dividends, which raised eyebrows.
Despite all this, Prospect says their hospitals will keep providing care during the bankruptcy process. They’re also facing lawsuits from several states over hospital closures that left communities in a bind.
It’s a tough situation, and we’ll have to see how it all plays out for them.
