Prospect Medical Holdings must put Crozer Health officially up for sale by Feb. 21
A similar agreement giving Prospect Medical time to sell Crozer Health was rejected in December.
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Prospect Medical Holdings Inc. must notify potential buyers that its Delaware County health system, Crozer Health, is for sale under an agreement approved Thursday by Court of Common Pleas Judge Cheryl L. Austin.
The for-profit hospital owner has 20 days to put Crozer on the market under the agreement between the Pennsylvania attorney general and Prospect. The agreement restricts the field of potential buyers to nonprofits. It also pauses litigation over the closure in 2022 of Crozer’s Delaware County Memorial Hospital in Drexel Hill for nine months.
Austin had initially rejected the agreement in December, but this week approved a revised version that gives Prospect less time to put Crozer on the market. Industry experts familiar with Crozer doubt that bidders will emerge who are willing to assume Crozer’s $155 million mortgage and its pension liability.
The judge ordered the attorney general’s office to “scrupulously” monitor Prospect’s progress on the potential sale and to notify the court if Prospect misses deadlines.
Even though Crozer is for-profit, the attorney general is involved because Prospect bought the assets of the Delaware County health system in 2016 from a nonprofit, the Crozer Keystone Health System. The paused litigation centers on whether the terms of that sale agreement were violated when Delaware County Memorial was closed.
Crozer welcomed the judge’s approval of the agreement: “We are pleased the court has issued the order and we look forward to continuing to serve the community as this process moves forward.”
The Foundation for Delaware County, which is the legal successor to Crozer Keystone, said it was pleased that the attorney general is limiting the sale to nonprofit buyers.
The foundation said the agreement means “there are no more hurdles remaining in the way of Prospect issuing a request for proposals seeking reputable nonprofit suitors that can work with the excellent staff there to rebuild a desperately needed health system.”
Austin is a visiting judge from Montgomery County. She was called in because a judge on the Delaware Court of Common Pleas is on the Foundation for Delaware County’s board of directors.