Leonard Green & Partners and Prospect, 2010–2021

analysisLeonard Green & Partners, L.P. is an investment adviser registered with the SEC under CRD number 158164; its Form ADV amendment of March 31, 2026 gives its principal office as 11111 Santa Monica Blvd., Suite 2000, Los Angeles. Its funds Green Equity Investors V, L.P. and Green Equity Investors Side V, L.P., whose general partner is GEI Capital V, LLC, formed Ivy Holdings Inc. to buy PMH in 2010, when PMH's merger proxy described Leonard Green as a private equity firm with about $9 billion of equity commitments under management. The proxy named John Danhakl, Peter Nolan and Jonathan Sokoloff as managing partners; the firm's website in 2026 lists Sokoloff and Danhakl as managing partners, John Baumer as a senior partner who joined in 1999 and Alyse Wagner as a partner who joined in 2003. ^{1 2 3}

analysisAfter the December 15, 2010 merger of Ivy Merger Sub Corp. into PMH, PMH was 62% indirectly owned by the Leonard Green funds, and Leonard Green's affiliates had the right to designate three of its five directors, John Baumer, Michael Solomon and Alyse Wagner. Under a management services agreement with PMH's subsidiary Prospect Green Management, LLC, Leonard Green was to receive an annual fee of $1,000,000 regardless of the services provided, a one-time $4,000,000 structuring fee for the merger, fees for major transactions as agreed and up to $50,000 a year of expenses, for a ten-year term renewing annually; the subsidiary paid the $4,000,000 fee and $441,000 of merger expenses by March 2011. ^{1 2 3}

analysisPYA's 2021 report records Baumer and Wagner's testimony that apart from the initial 2010 investment of about $151 million in Ivy Holdings the funds invested no further money, and characterises the funds' fiscal-2019 capital contribution as in substance a short-term shareholder loan returned through dividends; the Rhode Island Attorney General stated that apart from about $25 million contributed in 2019 and returned within a year, Leonard Green never invested its own money in PMH. These are the consultant's and the Attorney General's characterisations, and the funds were described as near the end of their life and obliged to liquidate their investments. The Senate Budget Committee's December 2023 letter states that Leonard Green exited PMH completely in 2021 and that over about a decade it and other owners extracted $658 million in fees and dividends, a figure that differs from other estimates because of period and payment definitions. ^{4 5}

analysisIn January 2025 Senators Grassley and Whitehouse of the Senate Budget Committee issued a report which, as PMH's chief restructuring officer summarised it, focused on Leonard Green's 11-year majority ownership and alleged that Leonard Green executives took home hundreds of millions of dollars in dividends and preferred stock redemptions while care deteriorated and the system took on unsustainable debt and lease obligations; the report itself is not retained. According to a 2026 investigative report, Leonard Green disputed the Senate report's conclusions and Prospect has denied any misconduct or negligent care. ^{6 7}

analysisThe Rhode Island Attorney General described the 2021 transaction as an in-house buy-out of majority stockholders whose representatives made up 60% of the board, after which Samuel Lee and David Topper would become the sole owners of Prospect. The conditions of the 2021 approval 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: a $12,000,000 global conditions escrow, with Leonard Green to fund $8,000,000, a $41,000,000 capital expenditure escrow, with Leonard Green to fund $26,800,000, and a $27,000,000 escrow for Medicare advance repayments to be funded entirely by Prospect. ¹

analysisLeonard Green was among those against whom litigation, including fraud and misrepresentation claims, was brought over the handling of the St. Joseph Health Services of Rhode Island pension, which Prospect had not assumed in 2014; PMH agreed to pay $27,250,000 with no admission of liability, and on July 29, 2021 the U.S. District Court for the District of Rhode Island gave final approval to the plan receiver's class settlement with PMH, Prospect East Holdings, Prospect CharterCARE and its two hospital companies and The Angell Pension Group, a gross settlement of $30,000,000 that included a $2,750,000 court deposit and two letters of credit, with $7,000,000 awarded to class counsel. It is also a named defendant in the Pennsylvania Attorney General's October 2024 suit over Crozer Health, whose allegations of mismanagement and breach of the purchase agreement are known from the description by PMH's chief restructuring officer; the defendants' answer is not retained. Leonard Green consented to the removal of that case to federal court, the Attorney General moved to remand, the retained docket shows no merits ruling, and a January 31, 2025 motion to approve a settlement among the debtors, the Attorney General, Lee and Topper was withdrawn by the debtors before April 21, 2025. ^{1 2 3 4 5}

analysisThe Chapter 11 plan's Non-Released Parties Schedule lists Leonard Green & Partners, Green Equity Investors V and Side V, Ivy LGP Co-Invest LLC and the former Leonard Green directors Alyse M. Wagner, Michael Solomon and John Baumer, as well as Lee, Topper and others, preserving possible estate claims without any finding of liability. Leonard Green and its affiliates did not respond to a December 2025 newspaper request for comment on the designation. A December 2025 newspaper report states that at a hearing that month Judge Stacey Jernigan noted that Leonard Green, Lee and Topper had been named non-released parties, and that an attorney for the trust managing Prospect's assets said people would have causes of action brought and the trust would work to bring as much money back in when the time was right; no such suit appears in the retained records. An April 2026 investigative report states that the court approved $10 million to pursue claims against former Prospect principals, with Leonard Green, Lee and Topper as the main targets, and that creditors' counsel told the court potentially hundreds of millions of dollars could be recovered; the order is not retained. Leonard Green declined to respond to the report's questions, Lee could not be reached for comment and Topper answered “no comment”. ^{6 7 8}