Prospect Medical Holdings: owners, hospitals and bankruptcy

analysisOwnership of PMH passed from public shareholders to Leonard Green's funds and rolled-over executives in December 2010, and to Samuel Lee and the Topper family trust through Chamber Inc. in 2021. Over that time a Senate committee letter puts the fees and dividends taken by Leonard Green and other owners at $658 million, and according to the Rhode Island Attorney General's consultant PMH sold most of its hospital buildings to Medical Properties Trust in 2019 and leased them back. Rhode Island issued an order and sued over unpaid vendors and unmet conditions, Pennsylvania's Attorney General sued over Crozer Health and Connecticut's filed a claim in the bankruptcy; in the 2025–2026 case most hospitals were sold or closed, and possible estate claims against Leonard Green, Lee and Topper were preserved. Each account keeps the parties' responses and the unresolved status of the claims beside it. ^{1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27}

analysisProspect Medical Holdings, Inc. (PMH) is a Delaware corporation whose business, by its own account, began operating in 1996. Its fiscal-2010 annual report gave SEC Commission File Number 1-32203, employer identification number 33-0564370 and offices at 10780 Santa Monica Blvd. in Los Angeles. The SEC's EDGAR record for Central Index Key 0001063561 lists it as an operating company in offices and clinics of doctors of medicine, with a September 30 fiscal year end, but shows a different employer identification number, 330604264. PMH's Chapter 11 petition of January 11, 2025 repeats 33-0564370, gives its principal place of business as 3824 Hughes Avenue, Culver City, California, lists no other names used in the previous eight years and identifies PMH as a health care business. ^{1 2 3 4}

analysisAt the petition date PMH's chief restructuring officer listed 16 hospitals owned and operated by Prospect: seven in California, two in Rhode Island (Roger Williams Medical Center and Our Lady of Fatima), three in Connecticut (Rockville General, Manchester Memorial and Waterbury) and four in Pennsylvania (Crozer-Chester Medical Center, Springfield, Taylor and Delaware County Memorial). The declaration notes that one of them, Foothill Regional Medical Center in Tustin, California, is managed by, but not directly owned by, PMH. Alta Hospitals System, LLC (employer identification number 26-0620619) and PHP Holdings, LLC (47-1856088, formerly PHP Holdings, Inc.) gave the same Culver City address in their own petitions. ^{4 5 6}

analysisPMH was a listed company until December 15, 2010, when Ivy Merger Sub Corp. merged into it and its shares, traded on the NASDAQ Global Market, were converted into the right to receive $8.50 in cash. The exception was the shares held by the buyer, Ivy Holdings Inc., including those contributed to it just before the merger by Samuel S. Lee, Mike Heather, David R. Topper, Dr. Jeereddi A. Prasad and certain employees. Afterwards PMH was 62% indirectly owned by the Leonard Green funds and 38% by the rollover and employee investors. ^{1 2}

analysisBefore the 2021 change of control, the Rhode Island Department of Health recorded, Ivy Holdings was owned 44.48% by Green Equity Investors V, 13.34% by Green Equity Investors Side V, 19.51% by Samuel Lee and 14.45% by David Topper's family trust, with other managers holding under 10% each. Afterwards it would be wholly owned by Chamber Inc., held 66.67% by Lee and 33.33% by the Topper trust. Debtor filings in the 2025 bankruptcy describe the resulting chain: Chamber, owned by Lee and the Topper family trust, owns Ivy Holdings, which owns Ivy Intermediate Holding, Inc., which owns PMH; in November 2024 PMH and Prospect Crozer, LLC named the same three parents in a federal court disclosure statement. ^{3 4 5}

analysisEstimates of what the owners took out differ by period and by which payments are counted; the journalists' figures are estimates, not audited amounts. A 2020 investigative report counted $645 million of dividends after the 2010 buyout, about $386 million to Leonard Green investors and the firm, $128 million to Lee, $94 million to Topper and $37 million to other executives, plus $14 million of fees; a 2026 follow-up put Leonard Green's and the founders' total at $658 million in fees and dividends. The chair and ranking member of the U.S. Senate Budget Committee wrote in December 2023 that Leonard Green, which exited completely in 2021, and other owners extracted $658 million in fees and dividends over about a decade. Leonard Green and Prospect told the 2020 report, in written statements through a jointly retained public-relations firm, that they had kept their commitments, abided by the law, provided good patient care and invested hundreds of millions of dollars, saving many failing hospitals and preserving thousands of jobs. For the 2026 report Leonard Green declined to respond, Lee could not be reached and Topper answered “no comment”. ^{1 2 3}

analysisOn August 23, 2019, according to the Rhode Island Attorney General's consultant summarising PMH's audited footnotes, PMH sold all of its hospital buildings in California (except Foothill Regional Medical Center), Connecticut and Pennsylvania to affiliates of Medical Properties Trust for about $1.4 billion, leased them back for 15 years with options for up to 15 more, and closed a mortgage loan of about $51 million on the Foothill property and a TRS promissory note of about $113 million. In the bankruptcy, the chair of PMH's Transaction Committee stated in December 2025 that PMH had transferred about $203.6 million in 2018–2021 to certain current directors and officers or entities they control, $199.4 million of it to Topper and Lee, and that the debtors had viable claims over some of these transfers. That is the committee's conclusion, not a court finding; no judgment on these claims appears in the retained records. ^{4 5}

analysisRhode Island's Department of Health issued an Immediate Compliance Order on November 9, 2023 after finding that Prospect's underfunding of Roger Williams Medical Center and Our Lady of Fatima Hospital was affecting operations: at least 19 elective surgeries were cancelled in October 2023 because equipment and supplies were unavailable owing to unpaid vendors, and PMH swept the hospitals' patient revenue daily and returned an operating allowance weekly. The same month the Attorney General sued PMH for failing to meet the 2021 conditions, including paying accounts more than 90 days overdue, which then exceeded $24 million; the Connecticut Attorney General's later draft complaint puts that amount at more than $18.9 million. On June 12, 2024 Associate Justice Brian P. Stern of the Rhode Island Superior Court granted a preliminary injunction requiring Prospect to pay $17,326,526 toward the overdue payables. ^{1 2}

analysisOn October 28, 2024 the Pennsylvania Attorney General's office sued PMH, Prospect Crozer, LLC, Leonard Green and Partners and two PMH directors, alleging mismanagement and neglect of Crozer Health and breaches of the purchase agreement; this description of the allegations comes from PMH's chief restructuring officer, and the defendants' answer is not retained. The case, naming Samuel Lee and David Topper among the defendants, was removed to the U.S. District Court for the Eastern District of Pennsylvania on October 31, 2024; Leonard Green, Lee and Topper filed notices consenting to removal, and the Attorney General moved to remand; the retained docket, last retrieved on December 16, 2024, shows no merits ruling. A January 31, 2025 motion in the bankruptcy for approval of a settlement among the debtors, the Attorney General, Lee and Topper was withdrawn by the debtors before April 21, 2025. On July 9, 2025 the Connecticut Attorney General filed a proof of claim attaching a draft complaint against PMH and Prospect Medical Systems, LLC for negligent misrepresentation over the 2016 hospital purchase, unjust enrichment and unfair trade practices. Those claims have not been adjudicated; in December 2025 the office's spokesperson said it was pursuing them, would add defendants if appropriate and was keeping its investigation open. ^{3 4 5 6 7}

analysisPMH and its hospital companies filed for Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Texas on January 11, 2025 (In re Prospect Medical Holdings, Inc., No. 25-80002), followed by the physician companies on July 7 and the top holding companies on September 19, 2025. The court confirmed the Amended Joint Chapter 11 Plan on December 15, 2025. The plan's Non-Released Parties Schedule, filed on October 1, 2025, keeps possible estate claims against persons including Lee, Topper, the Topper family trust, Leonard Green and its funds, the former Leonard Green directors Alyse M. Wagner, Michael Solomon and John Baumer, and former executives; exclusion from the releases preserves claims and is not a finding of liability. Leonard Green and its affiliates did not respond to a December 2025 newspaper request for comment on the designation. A December 2025 newspaper report states that at a hearing that month Judge Stacey Jernigan noted that Leonard Green, Lee and Topper had been named non-released parties, and that an attorney for the trust managing Prospect's assets said people would have causes of action brought and the trust would work to bring as much money back in when the time was right; no such suit appears in the retained records. ^{1 2 3 4 5 6}

analysisMost of the hospitals were sold or closed during the case. On August 29, 2025 the bankruptcy court approved the sale of the California hospital assets to NOR Healthcare Systems Corp., finding that the buyer acted in good faith without collusion and was not an insider or affiliate of the debtors. Eastern Connecticut Health Network's Rockville General and Manchester Memorial hospitals were sold to ECHN Holdings, Inc., later renamed Manchester Memorial Hospital, Inc., and the debtors agreed to sell Waterbury Hospital to UCHCFC Waterbury Health Corp. for $13,000,000, of which $9,000,000 was for real estate sold by its Medical Properties Trust owner. In Pennsylvania, according to Delaware County's government, which describes Prospect's tenure as years of mismanagement and financial exploitation, Taylor Hospital closed on April 26, 2025 and Crozer-Chester Medical Center on April 30, 2025; Taylor, Delaware County Memorial and Crozer-Chester were later bought by other parties and the outpatient sites by ChristianaCare, while a first buyer of Springfield Hospital failed to close. On March 6, 2026 The Centurion Foundation completed its purchase of Roger Williams Medical Center and Our Lady of Fatima Hospital in Rhode Island, which passed to a new nonprofit, CharterCARE Health of Rhode Island. ^{7 8 4 9 10}