Evidence records

documentedProspect Medical Holdings, Inc. (PMH) is a Delaware corporation. Its annual report for the fiscal year ended September 30, 2010 gave IRS employer identification number 33-0564370, SEC Commission File Number 1-32203 and principal executive offices at 10780 Santa Monica Blvd., Suite 400, Los Angeles, California. ¹

documentedThe SEC's EDGAR company record for Central Index Key 0001063561 lists PMH as an operating company in standard industrial classification 8011 (offices and clinics of doctors of medicine), incorporated in Delaware, with a September 30 fiscal year end and no ticker. ^{2 1 3}

qualification

The EDGAR record shows employer identification number 330604264, which differs from the 33-0564370 given in PMH's fiscal-2010 annual report and in its 2025 Chapter 11 petition.

documentedPMH's fiscal-2010 annual report states that the business effectively commenced in 1996. ¹

documentedPMH's voluntary Chapter 11 petition (Official Form 201), filed on January 11, 2025 in the U.S. Bankruptcy Court for the Northern District of Texas, gives employer identification number 33-0564370, a principal place of business at 3824 Hughes Avenue, Culver City, California, principal assets in Los Angeles County, lists no other names used in the previous eight years and identifies PMH as a health care business. ^{3 4}

documentedThe Chapter 11 petition of Alta Hospitals System, LLC gives employer identification number 26-0620619, a place of business at 3824 Hughes Avenue, Culver City, and principal assets in Los Angeles County. ⁵

documentedThe Chapter 11 petition of PHP Holdings, LLC gives employer identification number 47-1856088, its prior name PHP Holdings, Inc., and the address 3824 Hughes Ave., Culver City, California. ⁶

documentedAfter the December 2010 merger, PMH filed SEC Forms 15-12B and 15-15D to terminate the registration and reporting of its securities; the EDGAR record ends with filings made on July 26, 2011, the day PMH also reported the results of a consent solicitation from holders of its senior secured notes to amend their indenture, including its reporting covenants. ^{1 2}

documentedPMH's 2010 merger proxy recounts that from October 2009 management met potential sources of capital, including Leonard Green, and that on April 13, 2010 Leonard Green, on behalf of Green Equity Investors V, submitted a nonbinding proposal to buy all PMH shares for $7.50 in cash, conditional on Samuel Lee, David Topper, Mike Heather and Dr. Jeereddi Prasad rolling over a significant part of their equity. ³

documentedOn December 15, 2010 Ivy Merger Sub Corp. merged into PMH and PMH became an indirect wholly owned subsidiary of Ivy Holdings Inc. (the "Ivy Merger"); PMH's common stock ceased trading on the NASDAQ Global Market. Each share was converted into the right to receive $8.50 in cash, except shares held by Ivy Holdings, including shares contributed to it immediately before the merger by Samuel S. Lee, Mike Heather, David R. Topper, Dr. Jeereddi A. Prasad and certain employees. ⁴

documentedImmediately before the merger, the rollover investors, Samuel S. Lee (Chairman and Chief Executive Officer), Mike Heather (Chief Financial Officer), David R. Topper (President of the Alta Hospitals System subsidiary) and Dr. Jeereddi A. Prasad (a director and President of the ProMed Health Services subsidiary), contributed a total of 6,227,824 PMH shares to Ivy Holdings in exchange for 529,365 shares of Ivy Holdings common stock. ⁴

documentedIvy Holdings Inc. was formed by, and before the merger solely owned by, Green Equity Investors V, L.P. and Green Equity Investors Side V, L.P., Delaware limited partnerships affiliated with Leonard Green & Partners, L.P., which the proxy described as a private equity firm with about $9 billion of equity commitments under management. The general partner of each fund is GEI Capital V, LLC, a Leonard Green affiliate. The merger subsidiary, formed on July 21, 2010, was a wholly owned subsidiary of Ivy Intermediate Holding Inc., itself wholly owned by Ivy Holdings. ³

documentedAfter the merger all 100 outstanding shares of PMH common stock were owned by Ivy Intermediate Holding, Inc., a wholly owned subsidiary of Ivy Holdings Inc., and there was no public trading market for PMH's stock. ⁴

documentedPMH's fiscal-2010 annual report lists the owners of Ivy Holdings after the merger as Green Equity Investors V, L.P. (46.0%), Green Equity Investors Side V, L.P. (13.8%), Ivy LGP Co-Invest LLC (1.5%), Samuel Lee (20.2%), the David & Alexa Topper Family Trust (14.9%), Mike Heather (1.6%), Jeereddi Prasad, M.D. (1.2%) and other PMH employees (0.8%). ⁴

documentedPMH's quarterly report for the period ended March 31, 2011 states that after the merger PMH was 62% indirectly owned by the Leonard Green funds and 38% indirectly owned by the rollover and additional employee investors, and that it recorded a capital contribution of about $844,000 from the funds. ⁵

documentedThe 2010 merger proxy estimated that about $150,976,370 was needed to complete the merger, including about $127,984,876 for stockholders, $21,705,123 for option holders and $1,210,371 for warrant holders. Under an equity commitment letter the Leonard Green funds committed to buy $161,000,000 of equity in Ivy Holdings: Green Equity Investors V, L.P. $118,818,000 (73.8%) and Green Equity Investors Side V, L.P. $42,182,000 (26.2%). ³

documentedBesides common stock, the Leonard Green funds bought Ivy Holdings' 13.5% Senior Redeemable Exchangeable Cumulative Preferred Stock with an initial liquidation value of about $69,180,000 for about the same price. The preferred stock carries a cumulative annual dividend of 13.5% of liquidation value, ranks ahead of the common stock for dividends and is redeemable at a premium starting at 107% in 2011 and declining to 100% in 2015. ⁴

documentedThe Leonard Green funds agreed in the merger agreement to provide a backstop commitment for funds needed to meet the change-of-control repurchase provisions of PMH's senior secured notes. After the merger, holders tendered $8,200,000 of notes, which PMH repurchased effective January 19, 2011. ^{4 5}

documentedOn December 15, 2010 PMH and U.S. Bank National Association, as trustee, entered into a First Supplemental Indenture permitting PMH to make certain "Restricted Payments" immediately after the merger, and PMH and Royal Bank of Canada signed a consent and agreement amending covenants of PMH's credit agreement in connection with the merger. ^{4 5}

documentedPMH's fiscal-2010 annual report states that PMH had not previously paid cash dividends on its common stock and that its new credit agreements allowed dividends of up to 50% of consolidated net income when no default existed. ⁴

documentedAfter the merger, affiliates of Leonard Green & Partners, L.P. had the right to designate three of PMH's five directors, John Baumer, Michael Solomon and Alyse Wagner, and the management stockholders designated the other two, Samuel Lee and Jeereddi A. Prasad, M.D. ⁴

documentedPMH's fiscal-2010 annual report describes John Baumer as a Leonard Green partner since 1999 who led the due diligence for the Prospect acquisition, Michael Solomon as a Leonard Green principal since 2000 and Alyse Wagner as a Leonard Green vice president since 2003 who took part in that due diligence; all three became PMH directors on December 15, 2010. ⁴

documentedThe 2010 merger proxy describes Ivy Holdings Inc. as a Delaware corporation controlled by the Leonard Green funds, with its business address care of Leonard Green & Partners, L.P. at 11111 Santa Monica Boulevard, Los Angeles, and names John Baumer as its President and Alyse Wagner, a Leonard Green vice president, as its Vice President, Secretary & Treasurer. ³

documentedThe 2010 merger proxy's beneficial ownership table (as of November 8, 2010) lists Samuel S. Lee with 7,152,290 shares (30.3%), the David & Alexa Topper Family Trust with 4,967,922 (22.9%), the Terner Family Trust of Jacob Y. Terner and spouse with 1,880,424 (8.8%), Nelson Obus with 1,411,446 (6.6%), Joshua Landes with 1,349,174 (6.3%), Mike Heather with 742,833 (3.4%) and Jeereddi A. Prasad with 395,434 (1.8%). ³

qualification

The table also attributes 13,258,479 shares (54.5%) to Ivy Holdings, GEI Capital V, LLC, Green V Holdings LLC, Leonard Green & Partners, L.P., LGP Management, Inc. and the Leonard Green funds by virtue of voting agreements with the rollover investors; these are not additional shares.

documentedThe merger proxy estimated PMH's own merger expenses at $6,135,000, including a $2,600,000 financial adviser fee and $3,100,000 of legal fees, and PMH's compensation committee approved a $1,235,000 bonus for Chief Executive Officer Samuel Lee payable only on completion of the merger. The FTC granted early termination of the Hart-Scott-Rodino waiting period on September 14, 2010. ^{3 4}

documentedShareholder class actions challenging the buyout were filed in the Delaware Court of Chancery, including Bruce Lessey v. Prospect Medical Holdings, Inc. (filed August 25, 2010) and Thomas McCormack v. Samuel Lee (filed September 1, 2010), against PMH, the rollover investors, the special committee members, the Leonard Green funds, Ivy Holdings, the merger subsidiary and Leonard Green; they were consolidated on September 28, 2010 as In re Prospect Medical Holdings, Inc. Shareholders Litigation, C.A. No. 5760-VCN, alleging breach of fiduciary duty over the price and process. A second action by six shareholders was filed on December 30, 2010. ^{3 5}

qualification

These are allegations in shareholder complaints; PMH's March 2011 quarterly report states that the defendants believed the claims were without merit.

response

PMH's March 2011 quarterly report states that the defendants believed the actions were without merit.

outcome

No later outcome of these actions was found in the retained records.

documentedIvy Holdings' board adopted the 2010 Stock Option Plan of Ivy Holdings Inc. on December 15, 2010, and on February 22, 2011 options over 86,476 Ivy Holdings shares were granted to fifteen PMH employees. ⁵

documentedAt the closing of the merger, Ivy Holdings, Ivy Intermediate Holding Inc. and PMH entered into a tax sharing agreement allowing PMH to make payments to its two parent companies for taxes they owe as parents of the consolidated group. ⁵

documentedPMH's unaudited balance sheet at March 31, 2011 showed total assets of $388.1 million, liabilities of $294.8 million, long-term debt of $150.3 million plus $22.8 million current portion, and stockholder's equity of $96.4 million; revenue for the six months was $294.5 million and the net loss attributable to PMH $3.8 million. ⁵

documentedOn December 10, 2010 PMH formed a wholly owned subsidiary, Prospect Green Management, LLC, to be used solely to pay management compensation to Leonard Green for advisory services. ^{4 5}

documentedUnder a management services agreement dated December 15, 2010, Prospect Green Management, LLC agreed to pay Leonard Green & Partners, L.P. an annual fee of $1,000,000 regardless of the services provided, a one-time structuring fee of $4,000,000 for the merger, fees for major transactions as agreed and expenses of up to $50,000 a year, for a ten-year term renewing annually. PMH's March 2011 quarterly report states that the subsidiary paid the $4,000,000 fee and $441,000 of expenses for the merger. ^{5 9}

documentedSamuel S. Lee signed the management services agreement as chief executive of Prospect Green Management, LLC and John Baumer signed for Leonard Green & Partners, L.P. through its general partner LGP Management, Inc.; Ivy Holdings Inc. and Ivy Intermediate Holding Inc. unconditionally guaranteed the subsidiary's obligations to Leonard Green. ⁹

documentedSamuel S. Lee's December 2010 Schedule 13D amendment, filed as part of a group with David R. Topper, Alexa Topper, Mike Heather and Dr. Jeereddi A. Prasad, reported that after the merger of Ivy Merger Sub Corp. into PMH on December 15, 2010 under the merger agreement dated August 16, 2010, the reporting persons ceased to own any PMH common stock directly or beneficially and PMH was deregistering its securities. ¹⁰

documentedLeonard Green & Partners, L.P. is an investment adviser registered with the SEC under CRD number 158164; its annual Form ADV amendment dated March 31, 2026 gives its principal office as 11111 Santa Monica Blvd., Suite 2000, Los Angeles, California. ¹

documentedJacob Y. Terner, M.D. served as PMH's Chairman, Chief Executive Officer and a director from July 31, 1996 and left those posts during fiscal 2008. Until August 8, 2008 Terner was also the sole shareholder, sole director and chief executive of Prospect Medical Group, Inc., and the sole shareholder and a director and officer of Nuestra Familia Medical Group, Inc.; Terner remained a PMH shareholder. ^{1 2}

qualification

The filing dates the departure only to fiscal 2008; the 2010 annual report states that Samuel S. Lee was appointed chief executive on March 19, 2008 and chairman on May 14, 2008.

documentedPMH's fiscal-2006 annual report states that Jacob Terner had been Chairman and Chief Executive Officer of Century MediCorp, Inc. from 1988 to 1992 and, after its merger, an executive vice president and director of Foundation Health Corporation until December 1992, and that Terner was a director of Brotman Medical Center, Inc. ¹

documentedPMH's fiscal-2006 annual report disclosed that on June 30, 1997 Jacob Terner consented to a final judgment of permanent injunction in an SEC action arising from an insider-trading investigation into trading in Century MediCorp stock in June and July 1992 before the announcement of its merger with Foundation Health. ¹

response

Terner consented without admitting or denying the allegations, and the report states that the trading under investigation was by persons other than Dr. Terner.

outcome

The judgment enjoined Terner from violating Section 10(b) of the Securities Exchange Act and Rule 10b-5 and required a civil penalty of $225,750.

documentedPMH's executive officers listed in its fiscal-2006 annual report were Jacob Y. Terner (Chairman, Chief Executive Officer and director), Catherine S. Dickson (President, Chief Operating Officer and director), Mike Heather (Chief Financial Officer), R. Stewart Kahn (Executive Vice President and Secretary), Linda Hodges (Executive Vice President of Compliance), Michael A. Terner (Vice President, HMO Contracting and Health Plan Relations) and Donna Vigil (Vice President, Finance). ¹

documentedCatherine S. Dickson was elected a PMH director in February 2004 and served as PMH's President and Chief Operating Officer from July 2003; Dickson was also President and Chief Executive Officer of Prospect Medical Systems, having worked there since January 1998. PMH reported that Dickson resigned effective August 25, 2008 as a director, as President and Chief Operating Officer and from all positions with its subsidiaries, including as President and Chief Executive Officer of Prospect Medical Systems, and that under a December 22, 2008 severance and release agreement it agreed to pay Dickson $67,500. ^{3 4}

qualification

This biography is taken from a 2008 company filing as reproduced on a director-data profile; that profile lists the PMH directorship from the second quarter of 2005 to the third quarter of 2008.

documentedMike Heather was appointed PMH's Chief Financial Officer in April 2004, after serving as chief financial officer and later co-chief executive of WebVision, Inc. and as a Deloitte partner. Donna Vigil served as PMH's Chief Financial Officer from July 1998 and as Vice President of Finance from April 2004. ^{2 5}

documentedMichael A. Terner, the son of Jacob Terner, was PMH's Vice President of HMO Contracting and Health Plan Relations. When Executive Vice President R. Stewart Kahn resigned effective July 25, 2007, PMH reported that Kahn's mergers-and-acquisitions and some operating responsibilities would be assumed by Michael Terner. PMH and Michael Terner signed a severance and release agreement dated June 4, 2008. ^{1 6 4}

documentedIn connection with Jacob Terner's departure, PMH agreed to pay the Terner family trust $19,361.10 a month for the twelve months to April 30, 2009 and $42,694.45 a month for the twenty-four months to April 30, 2011, a total of $1,257,000. In September 2009 PMH stopped the payments after determining that Terner was not entitled to them; Terner sued to restore them and a trial began on January 31, 2011. ^{4 2 7 8}

outcome

A 2020 investigative report states that Terner won the full amount due, about $1 million, plus legal fees; the retained court record of the judgment was not available.

documentedOn August 8, 2007 PMH acquired Alta Healthcare System, Inc., the owner of four community hospitals in Los Angeles County, for about $103 million, paid roughly half in cash and half in stock, and repaid about $41.5 million of Alta's debt; the acquisition financing of $155 million was arranged with Bank of America, N.A. as agent. ²

documentedBefore the acquisition, Alta Healthcare System, Inc. was owned by Samuel S. Lee and the David & Alexa Topper Family Trust u/d/t September 29, 1997. Alta was merged into Prospect Hospitals System, LLC, a wholly owned PMH subsidiary, and the surviving company became Alta Hospitals System, LLC. The U.S. Federal Trade Commission granted early termination of the Hart-Scott-Rodino waiting period for the transaction on June 15, 2007. ^{9 2 10}

documentedFor the Alta interest, Samuel S. Lee received 943,568 shares of PMH common stock (8.3%), 836,440 shares of Series B preferred stock and $25.6 million in cash, according to Lee's Schedule 13D. The Series B preferred stock carried an 18% cumulative annual dividend, allowed its holders voting as a class to elect two PMH directors and gave them consent rights over specified company actions. ⁹

documentedUnder the Alta sale agreement, the selling shareholders, Samuel Lee and the Topper family trust, agreed to indemnify PMH for losses relating to specified litigation pending against Alta, Samuel Lee and David Topper, defined as the "Special Litigation". ⁹

documentedTo secure the August 2007 acquisition financing, Alta Los Angeles Hospitals, Inc. and Alta Hollywood Hospitals, Inc. granted first and second deeds of trust over Los Angeles Community Hospital, Hollywood Community Hospital, Norwalk Community Hospital and Van Nuys Community Hospital to Bank of America, N.A., and Jacob Terner pledged shares to the same bank. ⁴

documentedIn 2008 PMH and Prospect Medical Group entered into forbearance agreements with Bank of America, N.A., as administrative agent, and the lenders under PMH's first- and second-lien credit facilities (dated April 10, 2008 and amended on April 30 and May 14, 2008), followed by amendments with waivers and consents dated May 15 and June 30, 2008. ⁴

documentedOn June 1, 2007 Prospect Medical Group acquired the ProMed Entities for $48 million, paid as $41.04 million in cash and 1,543,237 PMH shares, and ProMed Health Care Administrators became a wholly owned PMH subsidiary, while Pomona Valley Medical Group and Upland Medical Group became wholly owned subsidiaries of Prospect Medical Group. Jeereddi A. Prasad, M.D., President of the ProMed companies since 1994 (and of Upland Medical Group since 2002), joined PMH's board on June 1, 2007; since 1991 Prasad had also been President and Medical Director of Chaparral Medical Group, Inc., a multi-specialty group Prasad founded. ²

documentedPMH's fiscal-2010 annual report describes Samuel S. Lee as PMH's Chief Executive Officer since March 19, 2008 and Chairman since May 14, 2008, a member of PMH's board since August 8, 2007, when Lee was also appointed chief executive of Alta, and an officer of all of PMH's direct and indirect subsidiaries; Lee co-founded Alta Healthcare System, Inc. in 1998 after it bought seven hospitals from Paracelsus Healthcare Corporation and had earlier been a general partner of Kline Hawkes & Co. ²

documentedAn August 2008 Schedule 13D amendment reported that David R. Topper, together with Alexa Topper, beneficially owned 5,192,435 PMH shares, or 25.5% of the class. The David & Alexa Topper Family Trust, U/D/T September 29, 1997, is a revocable trust whose settlors and trustees are David R. Topper and Alexa Topper, a married couple. ¹¹

documentedPMH's 2010 merger proxy records that in the quarter ended September 30, 2008 Samuel S. Lee and David R. Topper each acquired 4,182,200 PMH shares at $5.00 per share. ¹²

documentedSamuel Lee, then a director, more-than-10% owner and Chief Executive Officer of PMH, reported on Form 4 sales of PMH shares between May 14 and May 18, 2010 at prices from $7.00 to $7.11 under a Rule 10b5-1 trading plan adopted on March 17, 2010, after which Lee directly held 4,976,040 shares. ¹³

documentedPMH acquired about 33% of Brotman Medical Center, a hospital in Culver City, on August 31, 2005. Brotman filed for bankruptcy in October 2007; when it emerged on April 14, 2009 PMH's stake rose to about 72% after a $2.5 million investment, and to about 78% from November 15, 2010 through participation of about $3.07 million in a rights offering. ²

documentedAfter Brotman's April 2009 reorganization, PMH held 72% of Brotman's shares through Prospect Hospital Advisory Services, Inc., Culver Hospital Holdings held 27% and three other shareholders held the remaining 1%. In February 2011 Prospect Hospital Advisory Services invested $831,466 in a further rights-offering tranche, raising its stake from about 78.14% to about 78.20%. ^{15 7}

documentedPMH's quarterly report for the period ended March 31, 2011 describes Brotman Medical Center in Culver City as a hospital with 420 licensed and 185 staffed beds, 78.2% owned by PMH. ⁷

documentedProspect Hospital Advisory Services, Inc. (formerly Prospect Medical Management, Inc.) provided consulting services to Brotman from August 1, 2005 for $100,000 a month. An amended and restated agreement dated February 1, 2010, effective April 14, 2009, replaced the fee with 4.5% of Brotman's net operating revenue each month, payable in cash or in Brotman shares, and on January 7, 2010 the adviser bought $3.5 million of Brotman's 15% convertible notes. ^{2 7}

documentedUnder Brotman's 2009 reorganization plan, Los Angeles Jewish Home for Aging provided Brotman with financing of up to $22.25 million, secured by personal property and a mortgage on part of Brotman's real estate; PMH did not guarantee Brotman's debt. Brotman also had an April 14, 2009 credit agreement with Gemino Healthcare Finance, LLC. ²

documentedAfter Brotman's rights offering, its minority shareholder Culver Hospital Holdings sued PMH, Prospect Hospital Advisory Services, Brotman and members of Brotman's board. The trial court issued a preliminary injunction barring the conversion of Brotman notes and debt owed to Prospect into shares and the repayment of about $2 million owed to Prospect from the offering proceeds; Prospect appealed. ^{2 15}

outcome

On October 24, 2011 the California Court of Appeal, Second Appellate District, reversed the June 25, 2010 preliminary injunction, holding that the plaintiff could not bring direct claims that were derivative in nature, and awarded costs on appeal against the plaintiff.

documentedIn December 2009 Von Crockett was chief executive officer of Brotman Medical Center and a co-defendant in the Culver Hospital Holdings suit; on December 16, 2009 Crockett notified shareholders of an offering of $5.5 million of convertible subordinated notes, part of which was to repay $1,965,949 owed to the majority shareholder Prospect Hospital Advisory Services and up to $3 million of unpaid 401(k) contributions. ¹⁵

documentedPMH's March 2011 quarterly report disclosed that Brotman had accrued $13,834,000 for possible overpayments of Medicare outlier payments for its 2005 and 2006 fiscal years, which CMS could reconcile; that Brotman disputed a $4.8 million obligation as a net payer under California's hospital fee legislation, from which the Department of Health Care Services began withholding $65,000 a week for 108 weeks from February 14, 2011; and that $973,000 was accrued for repayment after a Medi-Cal audit. ⁷

documentedAt September 30, 2010 PMH owned and operated five hospitals in Los Angeles County with about 759 licensed beds: community hospitals in Hollywood, Los Angeles, Norwalk and Van Nuys acquired with Alta, and Brotman Medical Center in Culver City. Alta Hospitals System, LLC held them through Alta Hollywood Hospitals, Inc. (Hollywood and Van Nuys Community Hospitals) and Alta Los Angeles Hospitals, Inc. (Los Angeles and Norwalk Community Hospitals). ²

documentedPMH's fiscal-2010 annual report lists hospital real estate owned or controlled through Alta Hospitals System, LLC and Prospect Hospital Advisory Services, Inc.: Hollywood Community Hospital (100 beds), Los Angeles Community Hospital (130 beds), Norwalk Community Hospital (50 beds), the Van Nuys psychiatric hospital (59 beds) and the Brotman Medical Center campus in Culver City (420 beds). ²

documentedThe subsidiaries list filed as Exhibit 21.1 with PMH's 2009 annual report includes Alta Hospitals System, LLC, Alta Los Angeles Hospitals, Inc., Alta Hollywood Hospitals, Inc. and Brotman Medical Center, Inc. (California), Prospect Medical Systems, Inc. and Prospect Hospital Advisory Services, Inc. (Delaware), ProMed Health Services Company and ProMed Health Care Administrators (California), and affiliated medical groups. ¹⁶

documentedOn July 29, 2009 PMH issued $160 million of 12.75% senior secured notes due 2014 at 92.335% of face value under Rule 144A and Regulation S, with U.S. Bank National Association as indenture trustee, and opened a three-year $15 million revolving credit facility with Royal Bank of Canada as administrative agent and Jefferies Finance LLC, which had not been drawn by fiscal year-end 2010. ²

documentedPMH's 2009 notes and revolving facility were jointly and severally guaranteed by its restricted subsidiaries other than Brotman, Nuestra Familia and certain immaterial subsidiaries, and secured by first-priority liens on substantially all assets. A continuing guaranty of July 29, 2009 in favour of Royal Bank of Canada was given by subsidiaries including Alta Hospitals System, LLC, Alta Hollywood Hospitals, Inc., Alta Los Angeles Hospitals, Inc., ProMed Health Care Administrators, ProMed Health Services Company, Prospect Hospital Advisory Services, Inc., Prospect Medical Group, Inc. and Prospect Medical Systems, Inc. ²

documentedPMH's fiscal-2010 annual report identifies BDO USA, LLP as its principal accountant for the fiscal years ended September 30, 2010 and 2009. ²

documentedThe consultant PYA, P.C., reporting to the Rhode Island Department of Health on April 6, 2021 from PMH's audited fiscal-2018 statements, states that the roughly $1.12 billion of 2018 recapitalisation debt funded a dividend of about $457 million, refinanced earlier credit facilities, pre-funded about $40 million of subsidiaries' pension obligations and paid option holders and working capital; at September 30, 2018 PMH had an equity deficit of about $623 million, $7.7 million of cash (about one day of expenses) and about $208 million drawn on its revolver. ²

documentedPMH's audited statements for fiscal 2015 to 2020, as summarised by the Rhode Island Attorney General's consultant, show net revenue rising from $1.3 billion to $2.73 billion while operating income fell from $108.3 million to $15.6 million and long-term debt, excluding finance leases, rose from $451 million to nearly $1.6 billion; PMH paid about $478 million of interest over the period. ²

documentedPYA's summary of PMH's audited statements shows net income of $34.3 million in fiscal 2017 and net losses of $244.2 million in 2018, $297.7 million in 2019 and $99.6 million in 2020, on revenue of $2.91 billion, $2.89 billion, $2.85 billion and $2.73 billion; equity moved from $67.3 million in 2017 to deficits of $622.3 million, $970.1 million and $1,059.6 million. ²

documentedPMH's audited fiscal-2020 statements report total assets of $2,042,389,000 and total liabilities of $3,102,004,000, liabilities exceeding assets by more than $1 billion; in 2017 assets had exceeded liabilities by about $67 million. Liabilities to Medical Properties Trust, net of the current portion, were $1,290,556,000 and the accumulated deficit at September 30, 2020 was $1,124,577,000. ²

documentedPMH received about $276 million of federal CARES Act funds as Medicare advance payments, repayable to CMS, and about $183 million of Provider Relief Fund stimulus payments. At September 30, 2020 PMH reported cash of about $387 million, of which about $120 million reflected deferred payables and most of the increase came from government programmes, and about $211 million was available under its line of credit. ²

documentedUnder a real property asset purchase agreement dated July 10, 2019 between PMH, its subsidiaries and Medical Properties Trust companies, the purchase price for PMH hospital real estate was $1,385,796,096 subject to adjustment, a TRS lender was to lend PMH $112,937,204 (the "TRS Loan"), and a separate mortgage loan of $51,266,700 was to be advanced for one financed property. ¹

documentedSamuel S. Lee signed the July 10, 2019 agreement for PMH and its participating subsidiaries Alta Los Angeles Hospitals, Inc., Southern California Healthcare System, Inc., Alta Newport Hospital, Inc., Prospect Manchester Hospital, Inc., Prospect Rockville Hospital, Inc., Prospect Waterbury, Inc., Prospect Crozer, LLC, Prospect ECHN, Inc., Prospect CCMC, LLC and Prospect DCMH, LLC, as PMH's Chairman and Chief Executive Officer and as president or senior vice president of the subsidiaries. ¹

documentedThe buyers of the non-California hospital real estate under the July 2019 agreement were MPT property companies whose sole member is MPT Operating Partnership, L.P., including MPT of Waterbury PMH, LLC; the California properties were bought by MPT partnerships, and the TRS lender was MPT TRS Lender PMH, LLC, whose sole member is MPT Development Services, Inc. ¹

documentedMedical Properties Trust reported that in the second quarter of 2022 it funded an additional $100 million on an existing mortgage loan secured by a California hospital, that Prospect stayed current on rent and interest until the fourth quarter of 2022, and that it then recorded an impairment charge of about $280 million, reducing the carrying value of the Pennsylvania properties to about $250 million. ⁵

documentedOn May 23, 2023 Prospect affiliates completed a transaction with funds managed or advised by Centerbridge Credit CS, L.P. and Blue Torch Capital L.P. and with Medical Properties Trust: Centerbridge and Blue Torch provided $375 million of new capital, and in exchange for a reduction of about $646 million of obligations owed to MPT, MPT received senior preferred units representing 49% of PHP Holdings and a convertible promissory note. Prospect's $250 million asset-based revolving facility was repaid and its receivables became first-lien security for an MPT delayed-draw term loan of up to $75 million. ^{3 6}

documentedAs part of the May 2023 transaction, PHP Holdings, LLC issued a convertible promissory note of about $732 million to MPT Picasso Investors TRS, LLC; Prospect DCMH, LLC and Prospect CCMC, LLC borrowed under a real estate loan agreement with MPT affiliates, of which about $167 million was outstanding at the petition date; and PMH and certain subsidiaries entered into a loan agreement with MPT TRS Lender PMH, LLC as agent for a $25 million term loan and a $50 million delayed-draw term loan. ³

documentedMedical Properties Trust stated in May 2023 that its $1.6 billion of Prospect-related assets would be reconstituted as an investment of about $513 million in six leased California hospitals under a master lease; a $457 million investment in Connecticut real estate that Yale New Haven Health was expected to acquire, recovered through $355 million of cash at closing and managed-care equity; and a $150 million first-lien mortgage loan plus managed-care equity of $100 million resulting from the transfer of the Pennsylvania real estate back to Prospect. ⁶

documentedMedical Properties Trust reported in October 2023 that its investment in Prospect was $1.1 billion, that Prospect had resumed paying contractual rent of about $3 million a month through February 2024 and was to begin full rent on the roughly $513 million California portfolio at a mid-8% cash rate in March 2024, that its $75 million delayed-draw term loan to Prospect, secured by insurance receivables, was drawn to $45 million in the third quarter and $65 million afterwards, and that it had recorded about $82 million in the second and third quarters of 2023 from receiving an investment in PHP Holdings instead of cash rent and interest. ⁷

documentedMedical Properties Trust's 2024 annual report states that Prospect leased nine facilities under two master leases running to August 2034, that MPT also held a $155 million first mortgage loan on four Pennsylvania facilities and a $75 million term loan, all cross-defaulted and cross-collateralised, and that Prospect had made no scheduled rent or interest payment since the second quarter of 2024; MPT recorded more than $400 million of impairments and negative fair value adjustments on its Prospect investments in the fourth quarter of 2024. ⁵

documentedMedical Properties Trust stated that under definitive agreements of October 5, 2022 for the sale of three Connecticut facilities to Yale it was entitled to receive $355 million at closing, and that it was entitled to part of the proceeds of Astrana Health's purchase of most of PHP Holdings. ⁵

documentedMedical Properties Trust reported that in March 2025 the bankruptcy court approved a settlement among MPT, Prospect and others allowing Prospect to sell its hospital operations and related real estate with MPT's cooperation; that in September 2025 it settled with Prospect and Yale New Haven Health System, with $45 million in cash from Yale, the proceeds of the three Connecticut hospital sales and other consideration expected to exceed MPT's debtor-in-possession loan balance of about $100 million; and that it had agreed in principle to lease the California hospitals to NOR Healthcare Systems Corp. at stabilised annual cash rent of about $45 million, subject to regulatory approval. ⁸

qualification

Expectations stated by MPT in an October 2025 earnings release; its only remaining potential DIP commitment was a conditional loan of up to $30 million secured by assets including litigation proceeds.

documentedOn March 6, 2026 PMH and the other borrowers entered into a backstop loan and security agreement with MPT TRS Lender PMH, LLC providing secured exit financing: a single term loan of up to $30,000,000 for administrative and priority claims and a delayed-draw loan of $25,000,000 from receivables proceeds connected with the sales of the Waterbury, Manchester and Rockville hospitals; $34,398,684.09 of debtor-in-possession obligations rolled into the exit facility. Under an assumption agreement of the same date, the Prospect GUC Trust took over the borrowers' obligations as substitute borrower. ⁹

documentedThe exit loan agreement names Paul Rundell as authorised person for the borrowers before the debt passed to the GUC Trust, Frank Saidara for the designated Prospect entity and Steven Balasiano and Amanda Swift for the GUC Trust; payments go to an account of MPT Development Services, Inc. at JPMorgan Chase. ⁹

documentedIvy Holdings Inc. and Chamber Inc. entered into an Agreement and Plan of Merger dated October 2, 2019 under which Chamber would become Ivy Holdings' sole stockholder through the merger of a Chamber subsidiary into Ivy Holdings; Chamber submitted an initial application under Rhode Island's Hospital Conversions Act to the Rhode Island Attorney General on December 13, 2019. ¹

documentedChamber Inc. is a Delaware corporation incorporated on September 17, 2019 to carry out the transaction, with bylaws essentially mirroring Ivy Holdings'; Chamber and Ivy Holdings gave their principal offices as 3415 South Sepulveda Blvd., 9th Floor, Los Angeles. The transaction was for Samuel S. Lee and the David & Alexa Topper Family Trust to acquire all of the equity in Chamber, which would become the parent of Ivy Intermediate Holding Inc.; Ivy Holdings would remain Ivy Intermediate's parent and Ivy Intermediate would remain PMH's parent. ^{2 1}

documentedIn the 2020 application Samuel S. Lee was identified as chief executive officer of Chamber Inc., Ivy Holdings Inc., Ivy Intermediate Holding Inc., PMH, Prospect East Holdings, Inc. and Prospect East Hospital Advisory Services, LLC. ¹

documentedPYA's report to the Rhode Island Department of Health states that Lee and Topper held about 34% of Ivy Holdings at the time of the application and would hold 100% after the transaction, that the proposed owners were also leaders of the operating companies, and that Leonard Green would vacate three of the five seats on Ivy Holdings' board. ²

documentedThe Rhode Island Department of Health's June 1, 2021 decision records that before the transaction Ivy Holdings was owned by Green Equity Investors V, LP (44.48%), Green Equity Investors Side V, LP (13.34%), Samuel Lee (19.51%) and the Topper family trust (14.45%), with other managers holding under 10% each, and that afterwards Ivy Holdings would be wholly owned by Chamber Inc., owned 66.67% by Samuel Lee and 33.33% by David Topper's family trust. ^{4 2}

documentedThe Rhode Island Department of Health's 2024 decision notes that the 2024 Hospital Conversions Act application reported that Samuel Lee and the David & Alexa Topper Family Trust each owned 50% of Chamber, rather than the 66.67% and 33.33% approved in 2021, and that it was unclear when this change occurred; Chamber remained the for-profit parent of the system that includes Roger Williams Medical Center and Our Lady of Fatima Hospital. ⁴

documentedThe 2020 application stated that Ivy Holdings was owned by private equity partnerships, Samuel Lee, David Topper through the Topper family trust and other managers, that after the transaction the Leonard Green investor and the minority management shareholders would hold no interest, and that the shareholders who were officers or directors, Samuel Lee, David Topper, Dr. Jeereddi Prasad, Dr. Mitchell Lew and Bruce Grimshaw, had submitted conflict-of-interest statements; John Baumer, Alyse Wagner, Michael Solomon and Dr. Prasad received no compensation as board members. ¹

documentedIn the 2020 application the transacting parties stated that the transaction would be funded entirely with corporate cash, that they would incur no additional debt and pay no dividends to the acquirer as a result of it, and that Chamber, Ivy Holdings, Ivy Intermediate, Prospect East Holdings and Prospect East Hospital Advisory Services had no financial statements because they had no financial activity; they also reported that the member contribution to Prospect CharterCARE had risen from about $65.2 million to about $120.1 million. ¹

qualification

These are the applicants' own statements in a regulatory filing.

documentedOn June 1, 2021 the Rhode Island Attorney General approved the transaction with conditions under the Hospital Conversions Act. The conditions required Prospect and Leonard Green to set aside $80 million in escrow or letters of credit for the Rhode Island hospitals, to pay all operating losses for five years, to invest $72 million in capital expenditure through fiscal 2026 (at least $10 million a year) and to forgo management fees, among other conditions; Chamber, as acquirer, was required to pay for monitoring of compliance through an escrow. ²

documentedThe conditions required the $10,000,000 payable to Leonard Green under the merger agreement to be contributed to the escrows, and the escrows to be funded before closing as a $12,000,000 global conditions escrow (Prospect $4,000,000, Leonard Green $8,000,000), a $41,000,000 capital expenditure escrow (Prospect $14,200,000, Leonard Green $26,800,000) and a $27,000,000 escrow funded entirely by Prospect for Medicare advance repayments. ²

documentedAccording to the debtors' October 2025 bankruptcy motion, the cash escrow was funded under an escrow agreement dated June 1, 2021 among City National Bank as escrow agent, Prospect and Leonard Green affiliates and James P. Carris as escrow trustee, with the global conditions escrow funded $4 million by Prospect and $8 million by Leonard Green and the capital expenditure escrow $14.2 million by Prospect and $26.8 million by Leonard Green, to be released back in instalments as capital spending thresholds were met. ⁴

documentedThe 2021 conditions prohibited the Rhode Island hospitals' real estate from being pledged or used as collateral without the Attorney General's approval (conditions 9 and 17), and barred the sale, transfer or encumbrance of any Prospect CharterCARE property worth more than $100,000 during the monitoring period without 60 days' notice and approval; the Attorney General noted that the cash generated by Prospect CharterCARE was swept daily to Prospect. ²

documentedA condition of the 2021 decision required Prospect to extend the maturity of the TRS note held by Medical Properties Trust by five years from April 30, 2021, during which Prospect CharterCARE's assets could not be used to repay it, including through a sale-leaseback; after that period any transfer of its assets required the Attorney General's approval. ²

documentedPYA's report records that in December 2020 subsidiaries of Ivy Holdings agreed to pay $27.5 million in settlement of litigation over pension funding, of which about $22.5 million was expensed in fiscal 2020 and about $5 million was allocated to the purchase of the 15% residual interest in Prospect CharterCARE held by CharterCARE Community Board. ²

documentedDebtor filings in the Chapter 11 case describe Chamber Inc. as a Delaware corporation owned by Samuel Lee and the David Topper family trust and as the sole owner of Ivy Holdings Inc., which is the sole owner of Ivy Intermediate Holding, Inc., which is the sole owner of PMH. In November 2024 PMH and Prospect Crozer, LLC filed a corporate disclosure statement in the Eastern District of Pennsylvania naming Ivy Intermediate Holding, Ivy Holdings and Chamber. ^{4 6}

documentedThe Rhode Island Attorney General's 2021 decision states that Ivy Holdings and Ivy Intermediate Holding operate only as holding companies for PMH, with no operations other than required corporate actions and no financial activity other than lending funds to PMH. ²

documentedThe Attorney General's 2021 decision cites Section 6.09 of the Chamber/Ivy merger agreement as requiring that no dividends be paid for two years or until Prospect made a mandated $50 million pension payment, in addition to an initial $70 million pension payment under Section 4.07. ²

documentedOn or about October 18, 2013 PMH, Prospect East Holdings, Inc. and Prospect East Hospital Advisory Services, LLC, together with Prospect CharterCARE, filed a Hospital Conversions Act application with the Rhode Island Attorney General to buy assets of the nonprofit CharterCARE Health Partners, Roger Williams Medical Center and St. Joseph Health Services of Rhode Island and form a joint venture to own and operate the CharterCARE system; the Attorney General issued a decision on May 16, 2014. ¹

documentedUnder the 2014 joint venture, PMH owned 85% and CharterCARE Health Partners 15% of the new Prospect CharterCARE, whose board was appointed equally by the two owners; the transaction included a $50 million long-term capital commitment to be funded by PMH and an annual $10 million routine commitment by Prospect CharterCARE. PMH's chief restructuring officer later described the June 2014 partnership as making Prospect the majority owner while sharing governance equally with CharterCARE Community Board. ^{2 3}

documentedThe Rhode Island Department of Health's 2024 decision states that in 2014 PMH bought an 85% interest in the existing hospitals for $45 million, with a $50 million capital commitment within four years of closing; a nonprofit research report likewise stated that Prospect paid about $45 million for its 85% stake. ^{4 5}

qualification

The 2014 transaction documents themselves are not retained.

documentedThe Rhode Island structure in 2021 was: Prospect East Holdings, Inc., a wholly owned PMH subsidiary, held PMH's interest in Prospect CharterCARE, LLC; Prospect East Hospital Advisory Services, LLC, also wholly owned, oversaw day-to-day management; and Prospect CharterCARE, LLC owned Prospect CharterCARE RWMC, LLC (Roger Williams Medical Center, Providence, licence HOSP00133) and Prospect CharterCARE SJHSRI, LLC (Our Lady of Fatima Hospital, North Providence, licence HOSP00132). ^{2 1}

documentedJeffrey Liebman was chief executive officer of Prospect CharterCARE, LLC and its two hospital companies at the time of the 2020 application and in 2024; a 2024 provider registry entry lists Liebman as the authorised official of CharterCARE Our Lady of Fatima Hospital. ^{1 6}

documentedAs part of the 2014 joint venture, Prospect East, as managing member of Prospect CharterCARE, LLC, delegated day-to-day management of the Rhode Island hospitals to Prospect East Hospital Advisory Services under a management services agreement. The Attorney General found that PMH's average annual support to the hospitals beyond their own revenue was $14.7 million, which included a management fee averaging $6,977,000 a year, and made discontinuing the fee a condition of the 2021 transaction. ²

documentedProspect CharterCARE's audited income statements, as tabulated by the Attorney General's 2024 consultant, show management fee expense of $7.40 million in fiscal 2019, $6.53 million in fiscal 2020, $4.00 million in fiscal 2021 and none in fiscal 2022; in fiscal 2019 $24.7 million of accrued and unpaid management fees owed to PMH was forgiven and recorded as a non-cash equity contribution. ^{7 2}

documentedPYA reported that in fiscal 2020 Prospect CharterCARE received about $41 million of Provider Relief Fund distributions and about $27.5 million of Medicare advance (MAAP) funding and transferred the total of $68.5 million to PMH, which settled its prior balance owed to PMH and left a receivable from PMH on its balance sheet. ²

documentedCarris reported that the Fatima operating company's net revenue was flat at $141.2 million to $144.9 million from fiscal 2015 to 2019 with a cumulative five-year loss of $8.7 million, and that fiscal-2020 results included a $22.3 million legal settlement. ²

documentedAn independent monitor, Affiliated Monitors Inc., concluded its review of the 2014 commitments in 2020, finding that Prospect had spent $63,815,932.22 on long-term capital expenditure and Prospect CharterCARE $51,398,707.77 on routine expenses over the four-year monitoring period. ²

documentedRoger Williams Medical Center and Our Lady of Fatima Hospital entered into Property Assessed Clean Energy (PACE) financing agreements totalling about $60 million, which attach to the properties as tax liens; the Roger Williams financing of about $42 million was agreed in May 2020 at 5.75% maturing April 30, 2045, with payments collected through property tax bills. ²

documentedAn appraisal dated April 1, 2024 for the Attorney General's consultant identified Prospect CharterCARE, LLC as the fee-simple owner of the Rhode Island hospital real estate, including Our Lady of Fatima Hospital in North Providence and Roger Williams Medical Center in Providence, with no transactions involving those assets in the preceding three years; it valued the real property at a hypothetical $94 million and equipment at $27 million. ⁷

documentedAfter the St. Joseph Health Services of Rhode Island retirement plan went into receivership (PC-2017-3865, R.I. Super. Ct.), litigation including fraud and misrepresentation claims was brought against PMH, Leonard Green and others over the handling of the pension, which Prospect had not assumed in the 2014 joint venture. PMH agreed to pay $27,250,000. ^{2 8}

response

PMH's settlement was made with no admission of liability.

outcome

On July 29, 2021 the U.S. District Court for the District of Rhode Island (C.A. No. 18-328 WES) granted final approval of the class settlement brought by plan receiver Stephen Del Sesto against PMH, Prospect East Holdings, Prospect CharterCARE and its two hospital companies and The Angell Pension Group; the gross settlement amount was $30,000,000, including $2,750,000 from a Rhode Island Superior Court deposit and two JPMorgan Chase letters of credit for $22,250,000 and $5,000,000, and class counsel was awarded $7,000,000.

documentedThe District of Rhode Island order approving the pension settlement also names Samuel Lee, David Topper and the liquidating receiver of CharterCARE Community Board as parties to the settlement; the class comprised more than 2,700 plan participants. ⁸

documentedThe Rhode Island Attorney General's 2021 decision notes litigation, NLRB v. Prospect CharterCARE, No. 19-2289 (1st Cir.), that arose when Prospect refused to provide an internal report on an operating-room equipment issue at Our Lady of Fatima Hospital. ²

documentedOn November 9, 2023 the Rhode Island Department of Health issued an Immediate Compliance Order to PMH and related entities after finding that Prospect's underfunding of Roger Williams and Fatima was affecting operations; in October 2023 at least 19 elective surgeries were cancelled because equipment and supplies were unavailable owing to non-payment of vendors. The department stated that PMH swept all patient revenue from the hospitals daily and returned an operating allowance weekly, and that as of October 24 more than 250 of about 830 vendors required cash on delivery. ⁹

documentedIn November 2023 the Rhode Island Attorney General sued PMH (Neronha v. Prospect Medical Holdings, C.A. No. PC-2023-05832) for failing to comply with the 2021 conditions, including failure to pay accounts payable more than 90 days overdue, which then exceeded $24 million. ⁷

qualification

The Connecticut Attorney General's later draft complaint describes the overdue payables in the Rhode Island suit as more than $18.9 million.

outcome

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 accounts payable.

documentedOn November 17, 2022 The Centurion Foundation, Inc. entered into an asset purchase agreement with PMH to buy the CharterCARE system, naming QHR Health, LLC as the manager of the facilities; PMH's chief restructuring officer described an $80 million price for the two Rhode Island hospitals. PMH had engaged the investment bank H2C, which began searching for a buyer in April 2021 and sent a request for proposals to 24 hospitals and health systems. ^{7 3}

documentedThe Attorney General found that Centurion planned a fully leveraged acquisition in which the new CharterCARE entities would borrow about $160 million, $80 million of which would remain on the new system's books with the rest paid to PMH as the purchase price; the applicants represented total transaction debt of $193 million if the PACE loans were assumed. Under the amended purchase agreement Centurion would pay PMH $80 million less a $5 million indemnity escrow, outstanding acquisition costs, a Centurion note, the outstanding PACE balance if assumed and a working capital adjustment. ⁷

response

Asked what would happen if the new system could not take on more debt, Centurion answered that it could not predict the system's response but that the system would do its best to resolve any challenges by working with its counterparts in the state; the Attorney General read this as shifting the risk of failure to the State and its taxpayers.

documentedCMS issued statements of deficiencies to Roger Williams and Our Lady of Fatima for rescheduled surgeries and a lack of medical supplies that delayed procedures; a 2024 condition required the parties to fund repairs under CMS-approved plans of correction for deficiencies noted on form CMS-2567 issued on April 2, 2024. ⁷

documentedOn June 20, 2024 the Rhode Island Attorney General, Peter F. Neronha, conditionally approved the change of ownership of the system including Roger Williams Medical Center and Our Lady of Fatima Hospital from PMH to The Centurion Foundation under the Hospital Conversions Act, with 40 conditions; on November 14, 2024 the Attorney General issued an amended decision changing four of the forty conditions. ^{10 7}

documentedThe 2024 conditions required the parties to fund a $66.8 million Hospital Fund, to include the roughly $45 million remaining in the 2021 escrows with accrued interest, which could be applied if Leonard Green and Prospect assigned their rights in those funds; any debts owed by Centurion or the new system to Prospect after closing had to take the form of an unsecured subordinated note; and before closing Prospect had to release all liens and guarantees over CharterCARE assets securing its May 23, 2023 loan and pledge agreements with MPT TRS Lender PMH, LLC. ⁷

documentedOn February 2, 2025 PMH announced an amended and restated asset purchase agreement to sell CharterCARE Health Partners, including Roger Williams Medical Center and Our Lady of Fatima, to The Centurion Foundation and other nonprofit corporations. On May 22, 2025 the bankruptcy court entered orders approving the assumption of the purchase agreement, the Rhode Island reorganisation and the sale free and clear of interests. ^{11 12}

documentedOn October 30, 2025 the debtors moved for relief from the Centurion sale order and for authority to transfer the Rhode Island hospitals to the State of Rhode Island or, alternatively, to close them. ¹²

documentedOn March 6, 2026 The Centurion Foundation completed the acquisition of Roger Williams Medical Center, Our Lady of Fatima Hospital and related assets from PMH, financed with $101 million of private bonds raised through Bank of America under the sponsorship of the Rhode Island Health and Education Building Corporation and an $18 million supplemental reserve fund created by the state; the hospitals passed to a new nonprofit, CharterCARE Health of Rhode Island, with Ben Mingle as chairman and Jeffrey Liebman as chief executive officer. ¹³

documentedThe Supreme Court of Pennsylvania records that on January 8, 2016 Prospect acquired Delaware County Memorial Hospital and other assets from Crozer-Keystone Health System (now CKHS, Inc.) under an asset purchase agreement whose recitals expressed an intent to keep providing key services to vulnerable populations. PMH's chief restructuring officer dates the acquisition of Crozer-Keystone Health System, Delaware County's largest employer and health care provider, to July 2016; Prospect CCMC LLC signed a recognition agreement with the nurses' union on June 16, 2016 and assumed operation of Crozer-Chester Medical Center on July 1, 2016. ^{1 2 3}

documentedOn February 26, 2020 the U.S. Court of Appeals for the Third Circuit (Nos. 19-1439 and 19-1440) affirmed the refusal to vacate an arbitration award in favour of the Crozer-Chester nurses' union: Prospect CCMC, having assumed the predecessor's collective bargaining agreement, had to let nurses keep vacation time accrued above 200% of the annual limit. ²

documentedOn November 4, 2022 the Pennsylvania Department of Health ordered PMH and Prospect Crozer, LLC to suspend emergency services and banned admissions at Delaware County Memorial Hospital from November 7, 2022 because the hospital's failure to provide adequate diagnostic imaging was jeopardising patients' health and safety. ⁵

qualification

The Connecticut Attorney General's draft complaint describes the closure as the result of understaffing; the court record identifies inadequate diagnostic imaging services.

documentedCKHS, Inc. and The Foundation for Delaware County sued PMH and Prospect Crozer, LLC to stop the conversion of Delaware County Memorial Hospital; the Delaware County Court of Common Pleas granted them a preliminary injunction on October 11, 2022, and the Pennsylvania Attorney General's office joined on their side. On May 3, 2023 the Commonwealth Court of Pennsylvania (No. 1118 C.D. 2022) granted PMH and Prospect Crozer's appeal and reversed the injunction. ^{5 1}

response

On appeal Prospect challenged the trial court's finding of irreparable harm.

outcome

On January 22, 2025 the Supreme Court of Pennsylvania (Nos. 117 and 118 MAP 2023) reversed the Commonwealth Court, holding that it had misapplied the standard of review and that the record contained apparently reasonable grounds for the trial court's injunction, and remanded for further proceedings.

documentedOn January 31, 2025 the debtors filed an emergency motion (Docket No. 332) to approve the private sale of the Pennsylvania hospitals free and clear of interests and a settlement among the debtors, the Pennsylvania Attorney General, Samuel Lee and David Topper under Bankruptcy Rule 9019. ⁹

outcome

The debtors withdrew the motion; in their April 21, 2025 closure and sale supplement they stated that no viable bidder, operator or funding source had emerged for the hospitals as a whole.

documentedOn April 21, 2025 the debtors stated that, in the absence of any viable bidder, operator or third-party funding source, they had to begin closing the Pennsylvania hospitals while marketing ambulatory surgery and imaging sites and owned real estate. On April 23, 2025 the bankruptcy court approved the closure of certain Pennsylvania hospitals and sale procedures; on July 3, 2025 it approved the sale of the Pennsylvania ambulatory surgery and imaging sites, and on August 6, 2025 the abandonment of certain Pennsylvania hospitals and the sale of others. ^{9 10 11}

documentedThe debtors' October 13, 2025 notice reported that after an October 10, 2025 auction Chariot Allaire Partners LLC was the buyer of Crozer-Chester Medical Center for $10,000,000 and Restorative Health Foundation and Syan Investments the buyers of Springfield Hospital for $3,000,000; Medical Properties Trust, Inc. consented to both sales. ¹¹

documentedA litigation schedule filed with the plan supplement in the Chapter 11 case lists a case in the U.S. District Court for the Eastern District of Pennsylvania in which Prospect DCMH LLC, doing business as Delaware County Memorial Hospital, challenges the termination of the hospital's Medicare provider agreement by the Secretary of Health and Human Services. ¹²

documentedOn February 9, 2024 the U.S. District Court for the Eastern District of Pennsylvania (No. 2:24-cv-00494) dismissed a pro se complaint against PMH, Samuel Sang-Bum Lee, Leonard Green & Partners and others concerning a patient's death at Delaware County Memorial Hospital, for lack of a federal claim or established diversity jurisdiction, with leave to file an amended complaint. ¹³

documentedIn its annual affiliate report filed with Connecticut's Office of Health Care Access on March 9, 2017, Prospect ECHN, Inc. listed its two acute-care hospitals, Prospect Manchester Hospital, Inc. (doing business as The Manchester Memorial Hospital, Manchester) and Prospect Rockville Hospital, Inc. (doing business as The Rockville General Hospital, Vernon), and listed as affiliates Prospect CT Medical Foundation, Inc., which operates its physician practices, and Prospect ECHN Home Health, Inc. (Visiting Nurse and Health Services of Connecticut), its affiliated home-care provider; it identified Prospect CT, Inc. as the Connecticut parent of Prospect CT Medical Foundation, Inc. ⁴

documentedConnecticut's business registry, in records retrieved in October 2026, lists Prospect Manchester Hospital, Inc. (account 1203094), Prospect Rockville Hospital, Inc. (1203096) and Prospect ECHN, Inc. (1203097), all registered on April 12, 2016, and Prospect Waterbury, Inc. (1202801), registered on April 8, 2016, as active Connecticut stock corporations classified as general hospitals, each with 3824 Hughes Ave., Culver City, California, PMH's address, as its business address. ^{5 6 7 8}

documentedIn testimony to the Connecticut General Assembly's finance committee on March 15, 2019, Kimberly A. Lumia, Chief Regional Performance Officer for PMH, stated that PMH owned and operated Manchester Memorial, Rockville General and Waterbury hospitals, which together employed 5,111 people, paid $3,163,000 in state sales tax and $6,302,342 in property taxes and provided $45,749,468 in community benefit. ⁹

qualification

The provider-tax figure in the testimony is printed as "$40,487,00" and cannot be read reliably; these are the company's own statements.

documentedOn October 5, 2022 PMH and certain Connecticut affiliates agreed to sell the three Connecticut hospitals and related facilities to Yale New Haven Health Services Corporation for $435 million in cash, subject to adjustments. ²

documentedOn May 3, 2024 Yale New Haven Health Services Corporation sued in Connecticut Superior Court (No. HHD-CV24-6184328-S) for a declaration that it was not obliged to close the purchase because Prospect had breached covenants and could not meet closing conditions; Prospect had applied for a prejudgment remedy against Yale. In July 2024 the parties stipulated, to expedite trial, that the base price would fall by at least $23.5 million and that Yale would keep at least $411.5 million in an account at Northern Trust. ^{10 2}

qualification

Yale's account of its claims as set out in its bankruptcy filings.

response

PMH's chief restructuring officer described Yale's allegations of financial non-viability and material adverse change as a pretext to justify a price reduction, and stated that Yale breached the agreement and failed to close.

documentedOn January 22, 2025 the Connecticut debtors removed Yale's suit to the U.S. District Court for the District of Connecticut (No. 3:25-cv-105-MPS) and asked for transfer to the Northern District of Texas; on July 22, 2025 the federal court granted Yale's abstention motion and remanded the case to the Connecticut Superior Court. In their counterclaims the debtors acknowledged that the City of Waterbury had filed liens against Waterbury Hospital and that there were publicly filed notices of liens on their assets. ¹⁰

documentedIn August 2025 PMH moved in the bankruptcy court to assume the asset purchase agreement with Yale New Haven Health Services Corporation, with objections due by September 11, 2025. ¹¹

documentedThe confirmed Chapter 11 plan defines the Connecticut ECHN assets as the assets of Eastern Connecticut Health Network, including Rockville General Hospital and Manchester Memorial Hospital, sold under an asset purchase agreement between PMH, Prospect CT, Prospect ECHN, Prospect Rockville Hospital, Prospect Manchester Hospital and Prospect CT Medical Foundation as sellers and ECHN Holdings, Inc. as purchaser. A December 31, 2025 transition services agreement identifies the buyer as Manchester Memorial Hospital, Inc., a Connecticut nonprofit corporation formerly known as ECHN Holdings, Inc., and the purchase agreement as dated September 12, 2025. ¹²

documentedOn November 6, 2025 the debtors selected UCHCFC Waterbury Health Corp. as stalking-horse bidder for the Waterbury Hospital assets and signed an asset purchase agreement with it, with PMH as seller representative and Prospect Waterbury, Inc. among the sellers; no other qualified bids were received by the November 14, 2025 deadline. The final price was $13,000,000 in cash: $4,000,000 plus landlord deposits for the hospital's operating assets and $9,000,000 for the real estate sold by the Medical Properties Trust owner, under a master agreement of the same date among Prospect Waterbury, PMH, MPT of Waterbury PMH, LLC and MPT Operating Partnership, L.P. ¹³

documentedUnder the Waterbury sale agreement, liabilities under the Waterbury Hospital Cash Balance Plan and other benefit plans for which the Pension Benefit Guaranty Corporation is statutory trustee were excluded and did not pass to the buyer. ¹³

documentedAgiliti Health, Inc. sued Prospect Waterbury, Inc., doing business as Waterbury Hospital, in the U.S. District Court for the Central District of California in January 2024 (No. 2:2024cv00457) for breach of contract over unpaid invoices; after Prospect Waterbury did not respond, the clerk entered its default on February 27, 2024. ¹⁶

documentedThe debtors' monthly operating report for July 2025, signed by chief restructuring officer Paul Rundell, shows net intercompany cash outflows of $15,337,609 from the Connecticut companies and $14,556,562 from PMH and corporate entities, and inflows of $20,582,033 to the Rhode Island companies, $5,936,013 to California, $1,900,000 to Pennsylvania and $1,476,126 to the physician companies; the consolidated bank cash balance fell from $74,537,820 to $64,258,605. ¹⁷

documentedThe Chapter 11 petition of Prospect ECHN, Inc. (No. 25-80041) lists Prospect CT, Inc., at 3824 Hughes Ave., Culver City, as the holder of 100% of its equity; Yale's bankruptcy filings describe the Connecticut debtors party to the Yale sale agreement as PMH, Prospect CT, Inc., Prospect ECHN, Inc. (doing business as Eastern Connecticut Health Network), Prospect Rockville Hospital, Inc., Prospect Manchester Hospital, Inc., Prospect Waterbury, Inc. (doing business as The Waterbury Hospital) and Prospect CT Medical Foundation, Inc., among others. ^{18 10}

documentedAt the January 2025 petition date PMH's chief restructuring officer listed 16 hospitals owned and operated by Prospect: in California, Los Angeles Community Hospital, Southern California Hospital at Van Nuys, Los Angeles Community Hospital at Norwalk, Southern California Hospital at Hollywood, Southern California Hospital at Culver City, Foothill Regional Medical Center in Tustin and Los Angeles Community Hospital at Bellflower; in Rhode Island, Roger Williams Medical Center and Our Lady of Fatima; in Connecticut, Rockville General, Manchester Memorial and Waterbury; and in Pennsylvania, Crozer-Chester Medical Center, Springfield, Taylor and Delaware County Memorial hospitals. ¹

qualification

The declaration notes that Foothill Regional Medical Center is managed by, but not directly owned by, PMH.

documentedSouthern California Healthcare System, Inc., Alta Los Angeles Hospitals, Inc. and Alta Hospitals System, LLC, as borrowers, had a $90 million revolving credit facility from eCapital Healthcare Corp. under a credit and security agreement entered into on June 5, 2024, secured by substantially all of the assets and equity of the California hospitals other than Foothill Regional Medical Center. ¹

documentedAlta Los Angeles Hospitals, Inc. and Southern California Healthcare System, Inc. entered into assessment contracts dated July 19, 2019 with the California Statewide Communities Development Authority for PACE financing; the August 2025 sale order treats the authority's lien on the Medical Properties Trust real estate as a permitted lien that survives the sale and requires the buyer to pay delinquent PACE instalments. ³

documentedOn August 3, 2025 the debtors selected NOR Healthcare Systems Corp., a wholly owned subsidiary of Healthcare Systems of America, as stalking-horse bidder for the California assets and signed an asset purchase agreement; the consideration was the assumption of liabilities plus cash equal to the borrowing base under the eCapital credit line, or the difference after the eCapital debt was repaid or assumed. The debtors' notice stated that NOR had no connections to the debtors other than those arising from its stalking-horse bid. ⁶

documentedThe California asset purchase agreement dated August 3, 2025 names NOR Healthcare Systems Corp., a Nevada corporation, as purchaser and PMH as seller parent and seller representative for the Schedule A sellers, Alta Hospitals System, LLC, Southern California Healthcare System, Inc. (Southern California Hospital at Hollywood, Van Nuys and Culver City), Alta Los Angeles Hospitals, Inc. (Los Angeles Community Hospital, Norwalk and Bellflower) and Coordinated Regional Care Group, LLC; it was signed for PMH by chief restructuring officer Paul Rundell and defines the sellers' knowledge as that of Von Crockett and Alfredo Sabillo. ³

documentedThe agreement directs notices to the purchaser at 505 North Brand Blvd, Glendale, California, for the attention of Faisal Gill, and records a confidentiality agreement dated February 18, 2025 between PMH and Healthcare Systems of America. ³

documentedOn August 29, 2025 the U.S. Bankruptcy Court for the Northern District of Texas approved the sale of the California assets free and clear of interests to NOR Healthcare Systems Corp. as the highest offer after an August 28, 2025 hearing; the consideration comprised the assumed liabilities, cash equal to the eCapital borrowing base (or the eCapital payoff alternative) and an additional $8.5 million in cash. The court found that the purchaser acted in good faith without collusion and was not an insider or affiliate of the debtors. ³

documentedUnder the NOR agreement the parties were to file a Hart-Scott-Rodino notification and a material-transaction notice with California's Office of Health Care Affordability; at closing NOR was to receive a new lease of the Medical Properties Trust real estate and enter an interim lease-back and an interim management agreement under which it would manage the hospitals until licences were transferred. The California hospitals' Medicare advance repayment obligations listed in the sale order totalled $17,493,666.81. ³

documentedA U.S. Federal Trade Commission early-termination notice dated September 29, 2025 (transaction 20251865) names Mike Sarian as the acquiring party and Sang Bum (Samuel) Lee as the acquired party, with Alta Hospitals System, LLC, Southern California Healthcare System, Inc. and Alta Los Angeles Hospitals, Inc. as the acquired entities. ⁸

qualification

Under the FTC's listing format the acquired party is the ultimate parent entity of the companies sold; the notice does not describe ownership percentages.

documentedFindings of fact in In re Prime Healthcare ERISA Litigation (C.D. Cal., No. 8:20-cv-1529) list members of Prime Healthcare's 401(k) plan committee including Mike Heather, Prime's chief financial officer, from 2013 to 2020, Heather's successor as chief financial officer Steve Aleman, and Mike Sarian, Prime's President of Hospital Operations, from 2012 to 2020; after a bench trial from April 9 to April 16, 2024 the court concluded that the defendants had used a prudent process in managing the plan. ¹⁰

documentedIn a July 5, 2023 stipulation with California's Attorney General in the bankruptcy of Beverly Community Hospital Association (C.D. Cal., No. 2:23-bk-12359-SK), Michael Sarian signed as chairman and chief executive of American Healthcare Systems Foundation Inc., a North Carolina nonprofit selected as the winning bidder for the Montebello hospital's assets, and Faisal Gill signed as its counsel. ¹¹

documentedThe corporate ownership statement in the Chapter 11 petition of Alta Hospitals System, LLC (No. 25-80007, filed January 11, 2025) lists PMH as holder of 100% of its equity. ¹³

documentedPMH's affiliated California medical groups were held through nominee physician shareholders. Jacob Terner resigned as nominee shareholder, officer and director of Prospect Medical Group effective August 8, 2008 and was replaced by Osmundo R. Saguil, M.D.; from November 26, 2008 Arthur Lipper, M.D. replaced Dr. Saguil and was also appointed a vice president of PMH and of each of its direct and indirect subsidiaries other than Alta. At that time Dr. Lipper had for several years been a director of Nuestra Familia Medical Group and medical director of Prospect Health Source Medical Group, both affiliated physician organizations. The same report states that under an assignable option agreement among Prospect Medical Systems, Prospect Medical Group and the nominee shareholder, Prospect Medical Systems could change the owner of Prospect Medical Group at any time, and that Prospect Medical Group owned 55% of Nuestra Familia Medical Group. ¹

documentedUnder a stock purchase agreement of November 26, 2008 among Arthur Lipper, M.D. as buyer, Osmundo R. Saguil, M.D. as seller, Prospect Medical Group, Inc. (a California professional corporation) and Prospect Medical Systems, Inc., Dr. Lipper acquired the 4,000 shares representing 100% of Prospect Medical Group; a related option agreement of the same date gave Prospect Medical Group an assignable option over the shares of Nuestra Familia Medical Group, Inc. held of record by Dr. Lipper. ^{2 3}

documentedPMH's fiscal-2010 annual report states that Dr. Arthur Lipper served as nominee shareholder of Prospect Medical Group and Nuestra Familia Medical Group, as sole director of Prospect Medical Group and its subsidiary physician organizations and as their chief executive officer, president and treasurer (except the ProMed Entities), as one of two directors of Nuestra and as sole director of the ProMed Entities. ⁴

documentedPMH's March 2011 quarterly report states that all the affiliated medical groups were wholly owned by Prospect Medical Group except Nuestra, 62% owned by a nominee physician shareholder under an assignable option agreement, and AMVI/Prospect, a 50/50 joint venture between AMVI Care Health Network, Inc. and a Prospect medical group; Prospect Medical Group itself was owned by the same nominee under a separate assignable option agreement. The report names that nominee as Dr. Arthur Lipper and lists Prospect Medical Group as sole shareholder of the other affiliates, including Prospect Health Source Medical Group, Inc., Prospect NWOC Medical Group, Inc. and Upland Medical Group. ⁵

documentedProspect Medical Systems, Inc. administered claims payments under a risk-sharing arrangement between Prospect Medical Group and Brotman under an administrative services agreement dated October 1, 2005, amended October 1, 2009; the fees were eliminated in consolidation. ⁴

documentedA provider registry entry created on April 2, 2007 and last updated on July 31, 2008 lists Prospect Northwest Orange County Medical Group Inc. with Catherine S. Dickson as chief executive officer and authorised official. ⁶

documentedPMH disclosed that its affiliated medical groups paid the "Prasad Entities", controlled by director and Ivy Holdings shareholder Dr. Jeereddi A. Prasad and including Chaparral Medical Group, Inc., about $12,001,000 in fiscal 2008, $12,267,000 in fiscal 2009 and $14,254,000 in fiscal 2010; its March 2011 quarterly report states that the ProMed Entities paid a physician group in which one of their officers held an interest about $3.7 million and $7.3 million in the three and six months to March 31, 2011. ^{4 5}

documentedChaparral Medical Group Inc., Dr. Prasad's practice in Pomona, appears among the largest unsecured creditors of PHP Holdings and the other physician debtors in July 2025, with a trade payable of $94,513. ^{7 4}

documentedPMH's chief restructuring officer describes the group as more than 100 entities divided into HospitalCo, PMH and its hospital subsidiaries, and PhysicianCo, PHP Holdings and its subsidiaries, which were not debtors in January 2025. PMH owned 51% of PHP Holdings, and Prospect Healthcare Facilities Management, LLC, a wholly owned PMH subsidiary, was the member-manager of PHP Holdings and the manager of Foothill Regional Medical Center. ⁸

documentedPMH sponsored PhysicianCo employees' benefit plans, provided PHP Holdings with services under enterprise and vendor agreements and administrative services under a support services agreement, and certain PMH employees held transaction bonus agreements triggered by a change of control of PhysicianCo. ⁸

documentedOn July 7, 2025 the board of managers of Prospect Healthcare Facilities Management, LLC, acting for itself and as manager of PHP Holdings, the sole member of Prospect Intermediate Holdings, LLC (itself sole member of Prospect Medical Systems, LLC and other physician companies), comprised Samuel S. Lee, Mitchell Lew, M.D., Von Crockett, Elizabeth Abrams, Alan Carr and Sherman Edmiston. ⁷

documentedThe July 7, 2025 bankruptcy resolutions of Prospect Medical Group, Inc., Nuestra Familia Medical Group, Inc., Prospect NWOC Medical Group, Inc., Upland Medical Group and other California medical groups were signed by Mitchell Lew, M.D. as their board of directors; Prospect Medical Group, as shareholder of Prospect Health Source Medical Group, Inc., acted through Von Crockett as senior vice president. ⁷

documentedPHP Holdings' July 2025 Chapter 11 petition lists its equity holders as PMH (51%) and MPT Picasso Investors TRS, LLC (49%) of Birmingham, Alabama. ⁷

documentedProspect signed an asset and equity purchase agreement dated November 8, 2024 with Astrana Health, Inc. for the PhysicianCo business, for about $745 million in consideration before adjustments. ^{8 9}

documentedAstrana Health reported that on July 1, 2025 it completed the purchase of all equity of Prospect Health Plan, Inc. and Alta Newport Hospital, LLC (doing business as Foothill Regional Medical Center) and substantially all assets of certain subsidiaries of PHP Holdings, LLC under the November 8, 2024 agreement, with PHP Holdings, PHS Holdings, LLC, Prospect Intermediate Holdings, LLC, Prospect Provider Group RI, LLC and others as sellers and PMH as seller representative. ⁹

documentedUnder a July 1, 2025 side letter addressed to PMH as seller representative, Astrana retained $35,500,000 as a buyer credit deducted from the purchase price instead of funding an escrow, and the closing payment was reduced by $1,000,000 for the buyer's legal costs relating to PMH's insolvency; Von Crockett signed for PHP Holdings, through its manager Prospect Healthcare Facilities Management, and for the other seller companies as senior vice president. ¹⁰

documentedOn July 7, 2025 the physician companies not sold to Astrana filed Chapter 11 petitions to wind down, including PHP Holdings, LLC (No. 25-80157), Prospect Intermediate Holdings, ProMed Health Care Administrators (25-80161), Prospect Medical Systems, LLC (25-80162), Prospect Medical Group, Inc. (25-80170), Nuestra Familia Medical Group, Inc. (25-80179), Upland Medical Group (25-80174), Prospect NWOC Medical Group, Inc. (25-80176) and Prospect Health Source Medical Group, Inc. (25-80181). ^{11 12 13}

documentedBeginning on January 11, 2025 PMH and affiliated debtors filed voluntary Chapter 11 cases in the U.S. Bankruptcy Court for the Northern District of Texas, jointly administered under PMH's case, In re Prospect Medical Holdings, Inc., No. 25-80002 (SGJ); the hospital debtors filed on January 11, 2025, the physician debtors on July 7, 2025 and the top-level holding debtors on September 19, 2025. ^{1 2}

documentedThe hospital debtors' petitions list affiliated companies filing with PMH, including Alta Hospitals System, LLC (No. 25-80007), Prospect East Holdings, Inc. (25-80005), Hospital Advisory Services, Inc. (25-80006), Prospect CT, Inc. (25-80009), Prospect CharterCARE, LLC (25-80024), Alta Los Angeles Hospitals, Inc. (25-80025), Southern California Healthcare System, Inc. (25-80026), Prospect Oldco NJ, Inc. (25-80027), Prospect Crozer, LLC (25-80028), Prospect Waterbury, Inc. (25-80038), Prospect ECHN, Inc. (25-80041), Prospect CharterCARE RWMC, LLC (25-80050), Prospect CharterCARE SJHSRI, LLC (25-80051), Prospect CCMC, LLC (25-80054), Prospect DCMH, LLC (25-80055), Prospect Rockville Hospital, Inc. (25-80064) and Prospect Manchester Hospital, Inc. (25-80065), as well as Coordinated Regional Care Group, LLC (25-80003) and Prospect East Hospital Advisory Services, LLC (25-80004). ^{3 4}

documentedPMH's parent companies also became debtors in the same case as the "TopCo" debtors: Chamber Inc. (No. 25-33651), Ivy Holdings Inc. (25-80482) and Ivy Intermediate Holding Inc. (25-80483). ⁵

documentedPaul Rundell, a managing director of Alvarez & Marsal North America, LLC, has been chief restructuring officer of PMH and the other debtors since January 11, 2025; Alvarez & Marsal is the debtors' financial adviser. The Rhode Island Attorney General's 2024 consultant had noted that PMH recently engaged Alvarez & Marsal to identify and implement revenue-cycle improvements. ^{1 6}

documentedAt the petition date PMH's board had six directors: Samuel Lee, Von Crockett, David Topper, Mitchell Lew and the independent directors Alan Carr and Jeremy Rosenthal. On October 4, 2024 PMH had created a special committee and appointed Alan Carr and Elizabeth Abrams as independent directors. ¹

documentedThe debtors' cash management system comprised 194 bank accounts at eight banks with about $3.35 million of cash at the petition date; receivables from the facilities were collected into a master account and PMH paid payroll and vendors on behalf of other debtors, creating intercompany receivables and payables among debtors and non-debtor affiliates. ¹

documentedAt the outset of the case JMB Capital Partners Lending, LLC committed to provide $100.0 million of new-money debtor-in-possession financing. ¹

documentedOn January 20, 2025 PMH formed a Transaction Committee whose voting members were independent directors Alan Carr and Jeremy Rosenthal (chair) and chief executive Von Crockett, with chief restructuring officer Paul Rundell and general counsel Frank Saidara as advisory members. Jeremy Rosenthal is a partner of Force 10 Partners, a restructuring advisory firm. ⁷

documentedIn a December 11, 2025 declaration, Transaction Committee chair Jeremy Rosenthal stated that an investigation with counsel from Katten examined transactions from 2018 to 2021 in which PMH transferred about $203.6 million in total to certain current directors and officers or entities they control; the committee concluded that the debtors have viable claims relating to some of these transfers, and that $199.4 million of the $203.6 million went to David Topper and Samuel Lee, who were therefore excluded from the plan's releases. ⁷

qualification

This is the committee's conclusion that claims are viable, not a court finding; no judgment on these claims appears in the retained records.

documentedThe plan's Non-Released Parties Schedule, filed on October 1, 2025, provides that persons including Samuel S. Lee, David Topper, the David & Alexa Topper Family Trust, Leonard Green & Partners, Green Equity Investors V, L.P., Green Equity Investors Side V, L.P., Ivy LGP Co-Invest LLC, the former Leonard Green directors Alyse M. Wagner, Michael Solomon and John Baumer, and former executives including Mike Heather, Jeereddi Prasad, Mark Johnson, Michael Sarian, Donna Vigil and George D. Pillari are not released parties; the debtors reserved the right to modify the schedule. ^{8 9}

qualification

Exclusion from the plan's releases preserves possible estate claims; it is not a finding of liability.

response

Leonard Green and its affiliates did not respond to a December 2025 newspaper request for comment on the non-released designation.

outcome

A December 2025 newspaper report states that at a hearing that month Judge Stacey Jernigan noted that Leonard Green, Samuel Lee and David 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.

documentedUnder the plan supplement, estate causes of action against parties on the Non-Released Parties Schedule, including avoidance actions and claims for breach of fiduciary duty, aiding and abetting, unlawful dividends and unjust enrichment, pass to the GUC Trust. ¹⁰

documentedIn their monthly operating report for July 2025, filed on November 10, 2025, the debtors stated that all post-petition payments by the hospital and physician debtors to insiders were limited to ordinary-course wages and benefits. ¹²

documentedThe debtors filed their first plan and disclosure statement on May 23, 2025; the United States Trustee objected to the disclosure statement on June 18, 2025. A joint plan was filed on August 27, 2025 (Docket No. 2986) and on August 28, 2025 the court approved the disclosure statement and set a confirmation hearing for October 14, 2025, later adjourned; after further amendments the court entered an order confirming the Amended Joint Chapter 11 Plan on December 15, 2025. ^{13 14}

documentedOn March 6, 2026 the debtors gave notice that the Second Amended Joint Chapter 11 Plan had become effective; the notice states that the court approved the plan's release, exculpation and injunction provisions and that the plan binds the debtors, the plan administrator, the GUC Trust and its trustee and all holders of claims and interests. ^{13 15}

documentedUnder a GUC Trust agreement dated March 6, 2026 the debtors created the Prospect GUC Trust, sited in New York, to collect, administer and distribute trust assets, including assigned estate causes of action, for the backstop lender and general unsecured creditors; Steven Balasiano, founder of MHR Advisory Group, was appointed trustee, with Kelley Drye & Warren LLP as counsel. ¹⁰

documentedUnder a plan administrator agreement dated March 5, 2026, Saidara Group, Inc., a California corporation, acting through Frank Saidara, was appointed plan administrator for PMH and its debtor affiliates at $72,500 a month; the plan supplement states that no insider of the debtors was expected to be employed by the plan administrator. ¹⁰

documentedA schedule to the exit financing lists suits brought by PMH that continue after the plan: Prospect Medical Holdings, Inc. v. EOH Real Estate Holdings, Inc. in the New Jersey Superior Court (Essex County, ESX-L-02160-23), alleging breach of the implied covenant and seeking to pierce the corporate veil, and a suit by PMH and Prospect OldCo NJ, Inc. (formerly Prospect EOGH, Inc.) in Los Angeles Superior Court (22STCV27936) alleging fraud and unfair competition. ¹⁰

qualification

These are PMH's claims as plaintiff; their merits and outcomes are not in the retained records.

documentedOn May 19, 2025 the debtors filed a declaration by Frank Saidara in support of the Astrana sale transaction. ³

documentedPMH's chief restructuring officer recounts that losses led Prospect to close its San Antonio, Texas hospitals in 2019 and sell its Texas real estate in 2020, and that in October 2021 Prospect OldCo NJ, Inc. (formerly Prospect EOGH, Inc.) sold East Orange General Hospital to EOH Acquisition Group, LLC; the group had expanded into Texas in February 2012 with the Nix Health Care System and into New Jersey in March 2016 with East Orange General Hospital. ¹

documentedClass actions by people affected by the 2023 data breach against PMH and Southern California Hospital Healthcare System Inc were consolidated as In re Prospect Medical Holdings Inc Data Breach, No. 2:2023cv04936, in the U.S. District Court for the Eastern District of Pennsylvania (Judge Wendy Beetlestone), filed on December 13, 2023. ¹⁶

qualification

The retained docket record does not show the outcome.

documentedThe list of the 30 largest unsecured creditors in Alta Hospitals System, LLC's petition includes Cerner Corporation, MPT Operating Partnership LP, the California Department of Health Care Services and the Centers for Medicare & Medicaid Services, among others. ¹⁷

documentedPMH's chief restructuring officer stated that each debtor is an affiliate because PMH directly or indirectly owns or controls 20% or more of the outstanding voting securities of each debtor. ¹

documentedConnecticut Healthcare Insurance Company (CHIC) is a Cayman Islands exempted company whose registered owner is Prospect ECHN, Inc., an indirect wholly owned subsidiary of PMH; CHIC issued insurance policies to the debtors and ceded the risk to reinsurers under reinsurance contracts. ^{1 2}

documentedAccording to CHIC's foreign representatives, in Pennsylvania before October 1, 2020 the first $500,000 of liability on a claim was insured through Prospect Medical Holdings Risk Retention Group, Inc., a self-insurance programme of the Prospect debtors, and the next $500,000 by the state's MCare fund, with coverage above that from third-party excess insurers. From October 1, 2020, claim amounts above $1 million (up to a cap of $80 million) were insured through CHIC, subject to the debtors' self-insured retention between $1 million and $13.5 million, and CHIC reinsured those obligations with third-party insurers. ¹

documentedCHIC filed a winding-up petition in the Financial Services Division of the Grand Court of the Cayman Islands, and by order of March 18, 2026 Orla O'Regan and Michael Pearson were appointed joint provisional liquidators and foreign representatives; the provisional liquidators, the Prospect debtors and the reinsurers reached a settlement in principle under which the reinsurers would pay the Prospect debtors about $26 million in exchange for the commutation of CHIC policies and reinsurance, excluding the 2025–2026 policy year. ^{1 3}

qualification

CHIC's foreign representatives date the petition to March 12, 2026; the Grand Court's winding-up order refers to a petition filed on March 16, 2026.

documentedCHIC's foreign representatives sought recognition of the Cayman proceeding in the U.S. Bankruptcy Court for the Northern District of Texas (Chapter 15 case No. 26-32010, Judge Stacey G. Jernigan). ^{4 5 3}

response

Personal-injury claimants objected to the petition, and the foreign representatives replied to the objections.

outcome

After an evidentiary hearing on June 9, 2026 the court granted recognition with a narrower order. The June 10, 2026 order recognises the Cayman proceeding as a foreign main proceeding, confirms Michael Pearson and Orla O'Regan as foreign representatives, and states that it does not extend the Cayman stay to the debtors in PMH's Chapter 11 case or to CHIC's insurers and reinsurers.

documentedPMH's plan administrator moved in the Chapter 11 case (Docket No. 5082) for approval under Bankruptcy Rule 9019 of a settlement with CHIC and the settling reinsurers; the Prospect GUC Trust appeared as a creditor in the Chapter 15 case. ^{4 5}

documentedOn May 28, 2026 the Grand Court of the Cayman Islands (FSD 93 of 2026) ordered CHIC to be wound up, discharged Michael Pearson and Orla O'Regan of JTC Special Situations Limited as joint provisional liquidators and appointed them joint official liquidators; the Cayman Islands Gazette notice gives CHIC's registration number as 174133, with its registered office at Marsh Management Services Cayman Ltd. ^{3 6}

documentedIn its 2021 review the Rhode Island Attorney General examined under oath, for PMH, Samuel Lee (chief executive officer), David Topper (senior vice president), Mark Johnson (chief financial officer) and George Pillari (senior vice president of integration and operations), and, for Leonard Green, its partners Alyse Wagner and John Baumer. ¹

documentedIn May 2024 the Rhode Island Attorney General's office examined under oath, among others, Alfredo Sabillo (PMH chief financial officer), George Pillari (PMH corporate chief of integration and operations improvement), Ben Mingle (president of The Centurion Foundation) and Jeffrey Liebman (CharterCARE chief executive). ²

documentedThe U.S. Senate Budget Committee's letter of December 6, 2023 was addressed to Von Crockett and David Topper as co-chief executive officers of PMH. ³

documentedThe November 2025 Waterbury sale agreement names PMH's management as Von Crockett (co-chief executive officer), Alfredo Sabillo (chief financial officer) and Kim Lumia (chief operating officer); the August 2025 California agreement defines the sellers' knowledge as that of Von Crockett and Alfredo Sabillo. In the January 2025 Transaction Committee, Crockett was described as chief executive officer and Frank Saidara as general counsel. ^{6 7 8}

documentedIn March 2019 Kimberly A. Lumia testified to the Connecticut General Assembly as PMH's Chief Regional Performance Officer for its East Coast hospital division. ⁹

documentedThe omnibus resolutions authorising the January 11, 2025 bankruptcy filings were signed by Samuel S. Lee and David Topper as the board of Prospect Waterbury, Inc., by Samuel S. Lee alone as the board of Hospital Advisory Services, Inc., and by Von Crockett and David Topper as the boards of Prospect East Holdings, Prospect CT, Alta Los Angeles Hospitals, Southern California Healthcare System, Prospect ECHN, Prospect Rockville Hospital, Prospect Manchester Hospital, Prospect Oldco NJ and other corporations; Von Crockett signed as member for the group's limited liability companies, including Prospect East Hospital Advisory Services, Coordinated Regional Care Group, Prospect CharterCARE, Prospect Crozer, Prospect CharterCARE RWMC and SJHSRI, Prospect CCMC and Prospect DCMH. Frank Saidara certified the resolutions as secretary of each company. ¹⁰

documentedThe resolution authorising Alta Hospitals System, LLC's bankruptcy filing was signed by Von Crockett and David Topper as its board of managers. ¹¹

documentedPMH's 2010 merger proxy names John Danhakl (with the firm since 1995), Peter Nolan and Jonathan Sokoloff (with the firm since 1990) as managing partners of Leonard Green; Leonard Green's website in 2026 lists Jonathan Sokoloff and John Danhakl as managing partners, John Baumer as a senior partner who joined in 1999 and Alyse Wagner as a partner who joined in 2003. ^{18 19}