Prime Healthcare Foundation, the nonprofit arm of Ontario, Calif.-based Prime Healthcare, has decided not to pursue the acquisition of two Rhode Island hospitals owned by bankrupt Prospect Medical Holdings.
Prime was approached by Rhode Island officials in November regarding the potential purchase of North Providence-based Our Lady of Fatima Hospital and Providence-based Roger Williams Medical Center. In February, Los Angeles-based Prospect received approval from a Texas federal bankruptcy judge to sell the hospitals to The Centurion Foundation, an Atlanta-based nonprofit. However, the foundation has been unable to sell the bonds needed to finance the purchase.
“After very careful deliberation, the foundation’s board of directors believe it is most appropriate to allow the state, its partners, and all involved stakeholders to continue through the current process,” a Prime spokesperson said in a Dec. 4 statement shared with Becker’s. “This decision was not made lightly, and we care deeply about ensuring access to care and our mission of ‘saving hospitals, saving jobs, and saving lives.'”
Prospect, which filed for Chapter 11 bankruptcy protection in January, said on Oct. 30 it is facing insolvency from ongoing losses at the hospitals and is seeking permission from the judge to close the facilities or put them under the state’s control. More than six months after the intended 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.
Rhode Island Attorney General Peter Neronha said in a Dec. 4 statement that Prime had been in discussions with Prospect over the past few weeks regarding how to address — and whether it would assume — about $90 million in post-bankruptcy petition expenses “which someone (certainly not the state) will have to pay or otherwise address.” He said that Centurion has agreed to cover those expenses if they close the deal.
“Centurion has an opportunity to close this deal and their ability to do so is rapidly coming to a head, perhaps as early as this Friday when they will need to convince the Texas bankruptcy court that they can,” Mr. Neronha said.
Centurion said in a Dec. 1 filing that it remains “steadfastly” committed to completing the transaction. The foundation said Bank of America Securities has joined Barclays as a co-placement agent for the required bond financing that is scheduled to close on or around Jan. 15, 2026. The foundation is asking the judge to deny Prospect’s motion to close the hospitals.
“BofA’s willingness to serve as co-placement agent with Barclays reflects a thorough vetting of this transaction and confidence in its viability,” Centurion said in the statement. “With the existence of two placement agents actively marketing the bonds and engaging investors simultaneously, Centurion can move more efficiently through the investor outreach process and allow it to aggressively pursue the [Jan.] 15, 2026 closing timeline.”
