Los Angeles-based Prospect Medical Holdings is asking a federal bankruptcy judge to either place two Rhode Island hospitals under state control or allow them to close, The Providence Journal reported Oct. 31.
In November 2024, Prospect received approval to sell North Providence-based Our Lady of Fatima Hospital and Providence-based Roger Williams Medical Center to The Centurion Foundation, an Atlanta-based nonprofit. The Centurion Foundation, however, has been unable to sell the bonds needed to finance the purchase, according to the report. Centurion has twice tried to sell bonds, once in May in an attempt to raise $140 million, and in August in an attempt to raise $105 million. Both efforts failed.
Prospect, which filed for bankruptcy in January, said it is facing insolvency from ongoing losses at the hospitals. More than six months after the “promised closing date,” the company said it can no longer afford to fund the facilities “on the hope that Centurion may finally obtain adequate financing” to close the deal.
“Unless there can be some certainty that the Centurion sale will close, or the Rhode Island attorney general agrees to lower its requirements to whatever level of funding Centurion can meet, the debtors will be forced to continue to operate the RI Hospitals indefinitely at a considerable loss,” Prospect said in a motion filed in the U.S. Bankruptcy Court for the Northern District of Texas. “On one hand, the debtors remain committed to closing the Centurion sale, but are held hostage by the Rhode Island Attorney General’s closing conditions and Centurion’s inability to raise the necessary financing.”
Rhode Island’s governor and attorney general said they oppose Prospect’s motion.
“We will oppose this motion in court in the coming days and will continue to do everything we can to keep these hospitals open and operating for the foreseeable future,” Rhode Island Attorney General Peter Neronha said, according to the report.
A spokesperson for Prospect-owned CharterCare Health Partners, which operates the facilities, said the filing does not have any immediate impact on the hospitals, according to the report.
