This just goes to show that money problems can affect anyone. A major hospital company files for bankruptcy and now has plans to axe half of their hospitals.
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Major Hospital Company Files For Bankruptcy: Who Is It?
Daily Mail shares that Prospect Medical Holdings filed for Chapter 11 protection in Texas on Saturday. Chapter 11 is considered a "reorganization" bankruptcy. That means that it allows the company a way to restructure their debts without having to shut down their business. Thus ensuring they are protected from creditors while they devise a payment plan to repay their debts. This act is usually enacted to provide a company with some breathing room as they work out the logistics of their situation.
When a major hospital company files for bankruptcy, some major changes can occur. For Prospect Medical Holdings, they understood that and are planning to axe half of their hospitals. This healthcare giant operates 16 hospitals across four different states.
Additionally, Daily Mail shares that they own "166 clinics across California, Connecticut, Pennsylvania, and Rhode Island." Furthermore, they employ 12,600 people. What will become of them now that the company has filed for bankruptcy? Well, for now...nothing. As Chapter 11 protection grants, the hospitals, medical centers, clinics and all other facilities will continue to operate as normal while the restructuring is happening. However, once that is over there will be some changes.
Which Hospitals Are Getting The Boot?
Once the restructuring is done and Prospect Medical Holidays gets back on its feet it has a new plan. They want to focus exclusively on their seven California facilities. As for the operations in other states, those will be sold to rival healthcare providers. However, the people who work there can breathe a sigh of relief.
The company plans to transfer all associated jobs. Meaning that all those who are employed should remain that way, just under new leadership. However we all know how that can go, and it isn't necessarily all peaches and cream. Although they have found buyers for their centers in Rhode Island, they are still struggling to find a buyer for their Pennsylvania and Connecticut facilities.
When speaking about the incident, Prospect's chief executive officer, Von Crockett, had this to say.
"[The] actions represent an important step forward in our longstanding commitment to best serve the interests of our patients, physicians, employees, and communities."
