Prospect Medical Holdings, Owner of Crozer Health, Files for Bankruptcy with $400 Million in Debts

Jan 12, 2025, 04:41 PM

Prospect Medical Holdings, a Los Angeles-based healthcare network, has filed for Chapter 11 bankruptcy protection. The company, which operates more than a dozen hospitals across California, Pennsylvania, Rhode Island, and Connecticut, listed debts exceeding $400 million in its initial filing, with liabilities ranging from $1 billion to $10 billion and over 100,000 creditors. The bankruptcy filing comes as Prospect seeks to restructure its financial obligations and focus on its operations in California. The company has stated that its hospitals, medical centers, and physicians' offices will remain open and continue to provide uninterrupted patient care and services throughout the bankruptcy process. This filing follows a period of financial strain, exacerbated by the impacts of the COVID-19 pandemic, inflation, a significant cyberattack, and increased denials from health plans. Prospect Medical Holdings, the owner of Crozer Health, is also attempting to sell its hospital systems in Pennsylvania, Connecticut, and Rhode Island as part of its reorganization strategy.