Yale New Haven (Conn.) Health has settled with Los Angeles-based Prospect Medical Holdings, resolving a collapsed $435 million deal for Yale to acquire three Connecticut hospitals, according to court documents obtained by Becker’s.
Under the agreement, Yale New Haven will pay $45 million to Prospect to settle the dispute, the documents state.
The settlement allows Prospect to focus on other issues, such as its Chapter 11 bankruptcy filed in January. Additionally, it provides clarity to Prospect and potential bidders regarding the sale of Prospect’s Connecticut assets.
“This settlement will officially end all pending litigation between our health system and Prospect, allowing both parties to move forward and focus on the future,” a spokesperson for Yale New Haven said in a statement shared with Becker’s.
Yale New Haven Health had previously signed a deal in 2022 to acquire Waterbury (Conn.) Hospital, Eastern Connecticut Health Network’s Manchester (Conn.) Memorial Hospital and Vernon, Conn.-based Rockville General Hospital from Prospect for $435 million, but sued in May 2024 seeking to exit the deal.
The system alleged Prospect breached its contract because it did not pay rent and taxes on time, allowing the three hospitals to deteriorate. Prospect countersued, alleging Yale New Haven breached the acquisition agreement by failing both to deliver the purchase price and to make reasonable efforts to complete the deal.
Amid Prospect’s bankruptcy proceedings, Farmington, Conn.-based UConn Health is in talks to purchase Bristol (Conn.) Hospital, Day Kimball Hospital in Danielson, Conn., and Waterbury Hospital — for nearly $400 million. No bid had been filed for Waterbury Hospital as of Sept. 27, according to CT Insider.
Meanwhile, Hartford (Conn.) HealthCare plans to purchase Manchester Memorial Hospital and Rockville General Hospital for about $86 million as part of Prospect’s bankruptcy plan.
“As we look ahead, Yale New Haven Health remains focused on caring for the people and communities we are privileged to serve,” the health system said. “We look forward to continuing to grow critical services across our region.”
Becker’s has reached out to Prospect and will update this story if a comment is received.
