Judge Approves Closure of CharterCARE’s Sister Hospitals in PA - 2,600 Expected to Be Laid Off

Judge Approves Closure of CharterCARE’s Sister Hospitals in PA - 2,600 Expected to Be Laid Off

The fate of CharterCARE’s sister hospital group is now determined.

Both Rhode Island's CharterCARE and Pennsylvania’s Crozer Health are owned by the bankrupt Prospect Medical Holdings.

The layoff of 2,651 employees is expected to start Friday, as Delaware County’s largest health system closes quickly amid the bankruptcy of Prospect.

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The Philadelphia Inquirer reports, “Crozer Health’s Delaware County hospitals will stop receiving patients arriving by ambulance with medical emergencies at 8 a.m. on Wednesday, but walk-ins will still be accepted at its emergency department for the next week under closure procedures approved Tuesday in bankruptcy court. A bankruptcy judge in Dallas approved the closures of Crozer-Chester Medical Center in Upland and Taylor Hospital in Ridley Park by the health system’s for-profit owner, Prospect Medical Holdings, at the end of a nearly 2½-hour hearing.”

“‘This is a bad result, but it’s just the one that we’re stuck with,’ U.S. Bankruptcy Judge Stacey Jernigan said, declaring that Prospect ‘has a sound business justification’ to close the facilities. The closure plan is a work in progress, and is regularly being reviewed by the Pennsylvania Department of Health. ‘I’ve seen three versions in the last 12 hours,’ Prospect’s lawyer, Bill Curtin, told the judge,” reported the Inquirer.

While the fate of Crozer appears to be sealed, in Rhode Island, CharterCARE’s future is still uncertain.

The Rhode Island Attorney General approved the transfer of CharterCARE, which owns Roger Williams and Fatima hospitals, along with other assets, with conditions.

The proposed buyer is Centurion Foundation, a Georgia-based company that has never operated a hospital.

Centurion is seeking to finance the purchase leveraging a Rhode Island state financing agency.

As GoLocal previously reported, the Rhode Island Health and Educational Building Corporation (RIHEBC) moved forward on Thursday with $165 million in bonds to finance the sale of the bankrupt CharterCARE hospital group. Over the life of the bonds, the total payments will be $400 million.

S&P rates the bonds BB- and gives a negative outlook.