A judge has approved $30 million in emergency debt financing for Los Angeles-based Prospect Medical Holdings to avoid service cuts and layoffs at its California and Connecticut hospitals, CT Insider reported July 11.
Prospect, which sought Chapter 11 protection in January, has $18 million in payroll due the week of July 14. Thomas Califano, Prospect’s lead attorney, said on July 9 that at least an additional $55 million would be required to meet the company’s needs in the coming weeks, CT Insider reported.
“The debtor needs this money in just a few days or it’s not going to be able to make payroll and other important expenses to preserve the value of the estate,” Bankruptcy Court for the Northern District of Texas Chief Judge Stacy Jernigan, who approved the funding, said, according to the publication.
The company has been working to offload many of its 16 hospitals due to financial challenges.
Most recently, Alhambra, Calif.-based Astrana Health acquired the company’s Prospect Health System on July 1 for $708 million, which includes Prospect Health Plan, Prospect Medical Groups, Prospect Medical Systems, RightRx and Tustin, Calif.-based Foothill Regional Medical Center.
Prospect also closed its Upland, Pa.-based Crozer Health, comprising the closure of Upland-based Crozer-Chester Medical Center on May 2 and Ridley Park, Pa.-based Taylor Hospital on April 26. In late May, Newark, Del.-based ChristianaCare shared plans to acquire five Crozer outpatient facilities in Pennsylvania for $50.3 million.
In late May, Connecticut Gov. Ned Lamont said some of Prospect’s hospitals in Connecticut secured interest from “multiple buyers” after a $435 million deal with Yale New Haven Health (Conn.) to purchase all three state facilities was called “impossible” in February.
From its bankruptcy filing through April 30, the company saw $33 million in losses in Connecticut and $245 million companywide, CT Insider reported.
Becker’s has reached out to Prospect Medical Holdings for comment and will update this story should more information become available.
