Los Angeles-based Prospect Medical Holdings received bankruptcy court approval on Aug. 4 to abandon two of its closed Pennsylvania hospitals, Drexel Hill-based Delaware County Memorial Hospital and Ridley Park-based Taylor Hospital, should efforts to sell the properties fall through.
Prospect, which sought Chapter 11 protection in January and has been working to offload many of its 16 hospitals, shuttered DCMH, along with its Springfield (Pa.) Hospital in 2022. The company then shuttered Taylor Hospital on April 26 as part of its Upland, Pa.-based Crozer Health closure, which also included the May 2 closure of Crozer-Chester Medical Center in Upland.
The order, obtained by Becker’s, confirmed that DCMH is under contract to be sold to Drexel Hill-based Upper Darby School District for $600,000. While the company is authorized to pursue the sale of Taylor Hospital, abandonment of the property is allowed should a deal not be reached.
DCMH and Taylor are generating carrying costs of more than $775,000, combined, on a monthly basis and are exceeding more than $27 million in property tax liabilities, according to an emergency motion filed July 25 in bankruptcy court.
The highest offer DCMH previously received was $1.25 million, with an approximate estimated net value of $18.5 million. Taylor Hospital’s highest offer was $575,000, with a $7.1 million approximate estimated net value, the motion said.
“Pursuing and closing the sale of DCMH and Taylor will cost the estate significant resources, beyond the accruing carrying costs and tax obligations,” the motion continued. “Abandoning DCMH and Taylor will allow the taxing authorities the ability to exercise remedies they may have by virtue of their asserted property tax liens and preserve the debtors’ estate resources for value-accretive sale processes.”
The motion also said that no toxic or hazardous materials, medical waste or personal information would be left behind, as both hospital properties are no longer in use.
The news comes after a judge approved $30 million in emergency debt financing for Prospect to avoid layoffs and service cuts at its California and Connecticut hospitals.
Becker’s has reached out to Prospect Medical Holdings’ legal counsel for comment and will update this story should more information become available.
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