Reaching a deal on Crozer Health sale by court-imposed April 1 deadline faces challenges, lawyer for Delco says
The owner of Crozer-Chester Medical Center and Taylor Hospital filed for bankruptcy protection in January and has been talking about closing the two Delaware County hospitals ever since.
A lawyer for Delaware County told a bankruptcy judge Wednesday that reaching a deal by the court’s April 1 deadline to keep Crozer-Chester Medical Center and Taylor Hospital open was going to be a challenge.
Crozer’s owner, Prospect Medical Holdings, has not provided all the needed financial information, and the county “was somewhat surprised by the current terms” of the California-based company’s proposed sale agreement, Tobey Daluz, of Philadelphia law firm Ballard Spahr, told the judge.
“We can’t share more publicly now, but we did want to make your honor aware that we are facing challenges, and we truly hope to be able to move forward on the timeline that’s been established by the court and the debtors,” Daluz said.
A hearing to approve the sale of Crozer to a yet unidentified buyer is scheduled for Tuesday.
Daluz also told U.S. Bankruptcy Judge Stacey Jernigan that the county was acting as a facilitator in an effort to form a consortium that would acquire Crozer’s hospitals, which serve a low-income area of Delaware County that doesn’t have many other easily accessible options.
But details about a new owner or ownership model have not been publicly disclosed.
Daluz’s description differed significantly from Prospect attorney Bill Curtin’s statement in court on Monday that “this is going to be a transaction with essentially a partnership between Delaware County and Penn, with support from the Commonwealth and from other parties.”
The University of Pennsylvania Health System said after the Monday hearing that it is not negotiating an acquisition of Crozer and had no further comment Wednesday.
“There’s some sensitivity about talking about the specific parties, but there is ample attention to this matter within Delaware County and the larger Pennsylvania community,” Curtin said Wednesday.
Asked by Jernigan when an asset purchase agreement would be filed in court, Curtin said he had no estimate of when that might happen.
Typically during bankruptcy hearings on the fate of Crozer, a representative of the Pennsylvania Attorney General’s Office has addressed the court, confirming Prospect’s presentation of events. That didn’t happen Wednesday.
After the hearing Attorney General Dave Sunday said in an emailed statement: “We remain steadfast in our efforts to keep accessible health care for the Delaware County community. These next few days will be crucial to finalizing a purchase agreement that sustains Crozer Health as an economic engine for the community and local source for essential care.”
Prospect, which acquired Crozer in 2016, has been saying since its Jan. 11 bankruptcy filing that it was on the verge of closing Crozer-Chester in Upland and Taylor in Ridley Park unless outside money was provided to subsidize them. Currently, the for-profit facilities are being kept open by an infusion of $20 million in charitable funds from the nonprofit Foundation for Delaware County.
Daluz noted that the Ballard firm has been assisting the county for several years in connection with the Prospect health system. “We’re prepared and knowledgeable about advancing the interests and keeping the hospitals open,” she told the judge.
Lawyers for the Philadelphia law firm Duane Morris led by Alan C. Kessler have been representing Prospect locally for years.