Joint Statement on Prospect Medical Holdings Inc.’s National Bankruptcy Announcement
Submitted by the Delaware County State Legislative Delegation and County Council
Rep. Leanne Krueger January 13, 2025 | 9:27 AM
DELAWARE COUNTY, PA – January 13, 2025 – Prospect Medical Holdings Inc., the parent company of the Crozer Health System, declared Chapter 11 Bankruptcy in the US Bankruptcy Court for the Northern District of Texas. The bankruptcy proceedings will restructure Prospect’s network of hospitals and health networks in California, Connecticut, Rhode Island, and Pennsylvania, including Crozer Chester Medical Center, Taylor Hospital, and the closed Springfield and Delaware County Memorial Hospitals. Prospect’s bankruptcy filing will stay current litigation against the company, including the PA Attorney General’s recent lawsuit against it and its former private equity owner, Leonard Green & Partners.
Below is the Delaware County State and County leaders’ statement in response to Prospect’s bankruptcy announcement.
We are fiercely disappointed but not surprised by Prospect Medical Holdings’ declaration of bankruptcy across the country yesterday. This bankruptcy leaves our community’s most vulnerable—patients, families, and frontline healthcare workers—in a precarious position, a consequence of years of mismanagement and disregard for public health.
This crisis has been building since Prospect acquired the Crozer system and it used leverage to extract value from the system for the benefit of its investors at the expense of the system's patients and staff. Delaware County has fought the closure of facilities and programs through legislative action and in court and has financially supported the Foundation of Delaware County in its efforts to hold Prospect to the agreements it made at the time of the acquisition. During the same time period, the County’s state delegation has rung the alarm on Prospect’s disastrous management of the Crozer health system. This bankruptcy is the direct result of Prospect’s financial decisions and the private equity playbook. This crisis adds to the glaring list of examples that Prospect alone has shown us of why state and federal oversight and reform of private equity involvement in healthcare are urgently needed to prevent corporations from exploiting essential services for profit at the expense of communities.
Delaware County’s state legislators and elected County officials call on Prospect and its creditors to make all possible efforts to maintain services and operations at Crozer and Taylor hospitals while restructuring in bankruptcy. We stand with Crozer’s dedicated staff who have heroically served Delaware County patients and families while Prospect let conditions and resources deteriorate to this point. We urge Prospect and its creditors to prioritize the needs of these workers, whose dedication has sustained Crozer through years of underfunding and mismanagement.
While working to hold Prospect and its former owners accountable for their financial looting of Crozer, the delegation and county leaders have worked to secure state and federal funding to support health services in Delaware County, including at Crozer, the new County Department of Health, and other health providers serving the county.
A county-led contingency planning working group is ramping up its efforts in response to yesterday’s announcement, but many questions about Prospect’s plans for Crozer during this time will have to be answered in bankruptcy court. In the meantime, our contingency planning group is mobilizing resources and partnerships to ensure that patients continue to receive the care they need without disruption.
Submitted by the Delaware County State Legislative Delegation and County Council: Senators Amanda Cappelletti, John Kane, Tim Kearney, and Anthony H. Williams, and Representatives Leanne Krueger, Jennifer O’Mara, Gina H. Curry, Lisa Borowski, Heather Boyd, Carol Kazeem, David Delloso, Greg Vitali, Regina Young, Craig Williams, and Speaker Joanna McClinton along with County Council Chair Monica Taylor and Council Members Christine Reuther, Elaine Schaeffer, Kevin Madden, and Richard Womack.