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  • Bankrupt Prospect Medical received bids of $10 million for Crozer-Chester Medical Center and $3 million for Springfield Hospital

    Bankrupt Prospect Medical received bids of $10 million for Crozer-Chester Medical Center and $3 million for Springfield Hospital

    The winning bids at a bankruptcy auction were $10 million for Crozer-Chester Medical Center and $3 million for Springfield Hospital, owner Prospect Medical Holdings Inc. said in a court filing late Monday.

    The California for-profit, which filed for bankruptcy protection in January, identified the top bidders from Friday’s auction as Chariot Allaire Partners LLC for Crozer-Chester in Upland and Restorative Health Foundation and Syan Investments LLC for Springfield.

    Prospect did not say in its filing when it expected the sales to be finalized. Both hospitals are currently closed.

    Yoel Polack, who is in the group that wants to buy Crozer-Chester, initially declined to comment about plans for the property. “We are still working through final administrative details of the sale and will wait until next week to make any statements to the press,” he said in an email over the weekend.

    Polack is identified on LinkedIn as principal at Chariot Equities, which describes itself on its website as a real estate investment and development company. Previously, Polack worked in healthcare real estate, such as medical office buildings, at Simone Development Cos. in New York.

    Polack had an out-of-office reply on his email Tuesday, saying he would have no internet or phone access until Thursday.

    The president of Upland Borough Council, Christine Peterson, did not respond to a request for comment Monday about the winning bidder.

    No definitive information was available on Restorative Health Foundation and Syan Investments.

    A phone number registered under the name Restorative Health Foundation in Philadelphia led to a home care agency called Restorative Home Care. The person who answered the phone Tuesday said she knew of no connection to a bid for Springfield Hospital. Another number for Restorative Health Foundation had a voicemail box that was full.

    Restorative Health and Syan also participated in the Crozer-Chester auction, driving the winning bid up to $10 million from Chariot Allaire’s original $7 million offer. They were identified as the backup bidder for Crozer-Chester, in case Chariot Allaire doesn’t complete the purchase.

    At Springfield, KQT Aikens Partners 2 LLC is the backup buyer. That involves the same group of local investors that bought Taylor Hospital for $1 million last month.

    Prospect shuttered Crozer-Chester this spring, following the failure of government-led efforts to find a new, nonprofit owner. It had closed Springfield in 2022.

  • Prospect gets OK to ‘abandon’ Crozer-Chester Medical Center and Springfield Hospital if sales don’t go through

    Prospect gets OK to ‘abandon’ Crozer-Chester Medical Center and Springfield Hospital if sales don’t go through

    Prospect Medical Holdings Inc. had a $7 million bid for Crozer-Chester Medical Center and a $3 million bid for Springfield Hospital ahead of an auction held in the afternoon, an attorney for the bankrupt company said at a hearing Friday.

    Neither the winning bidders nor the top bids were identified publicly after the auction. Prospect did not respond to a request for information about the prospective buyers. Community members have been pushing for the restoration of hospital services to Crozer-Chester in particular.

    At the same hearing, U.S. Bankruptcy Judge Stacey Jernigan approved Prospect’s plan to “abandon” the two shuttered Delaware County hospitals if the sales fail to close promptly because the properties have become a financial burden to the bankruptcy estate.

    Prospect used a similar tactic last summer in the case of Crozer Health’s two other closed hospitals, Delaware County Memorial Hospital in Drexel Hill and Taylor Hospital in Ridley. Both of those hospitals have since been sold.

    In a court filing Friday morning, Prospect said it had reached agreements with local tax authorities to set the assessments on Crozer-Chester and Springfield at the sale price for this year and next year.

    The properties had elevated assessments because of Prospect’s financial maneuvers since the California for-profit acquired the county’s largest health system in 2016. The current assessment on Crozer-Chester is $114.6 million, according to public records. That figure is $10.9 million for Springfield

    The filing also said school districts and others would accept general unsecured claims in the bankruptcy. Those claims are unlikely to have much value.

    Much of Friday’s hearing on the abandonment motion was taken up with discussion of complications at Springfield. An attorney for Springfield Township said his client had not agreed to the tax deal outlined in the abandonment motion and was not part of the discussions.

    That’s because Springfield Township has not filed a bankruptcy claim for back taxes, according to Prospect’s attorney, Maegan Quajada, of Sidley Austin. A hurdle in any sale is a deed restriction on the Springfield property that requires the operation of an emergency department that is open all the time.

    However, Prospect closed the Springfield Hospital emergency department in early 2022, so it’s not clear how much weight the deed restriction has.

    When Prospect announced late last month that it would hold an auction for Springfield and Crozer-Chester, it said any bids had to have no conditions on them, such as the resolution of tax matters or the Springfield deed restriction.

    But then Prospect changed its mind and accepted conditional bids and rejected one that was unconditional, an attorney said in court Friday.

    Quajada said the unidentified contingencies are being taken care of. “We already know we can meet them,” she said.

  • Crozer-Chester Medical Center and Springfield Hospital would be ‘abandoned’ under Prospect Medical bankruptcy motion

    Crozer-Chester Medical Center and Springfield Hospital would be ‘abandoned’ under Prospect Medical bankruptcy motion

    Prospect Medical Holdings Inc. said in an emergency bankruptcy motion Friday evening that it wants to “abandon” Delaware County’s Crozer-Chester Medical Center and Springfield Hospital unless local authorities agree to its property tax demands.

    The California for-profit, which filed for bankruptcy in January, said it has potential buyers for the properties in Upland Borough and Springfield Township, which were once part of Crozer Health, the county’s largest health system and an important safety-net provider.

    However, the bidders won’t close the deals unless tax assessments on the properties are reduced to the amount of the sale prices, Prospect said in its motion. The filing did not say what bids Prospect had received or how much Prospect owes in taxes. The assessments have been in dispute for years.

    If U.S. Bankruptcy Judge Stacey Jernigan approves the motion at a hearing scheduled for Friday, Prospect would be allowed to jettison the properties from the case and stop the accumulation of property tax liabilities against the bankruptcy estate.

    Then, if the tax authorities still do not agree to Prospect’s demands, the only way the municipalities and school districts could collect at least part of what they are owed would be to foreclose on the properties and put them up for a tax sale — a process that could take years.

    Prospect had said previously it planned to hold an auction Oct. 10 for the Crozer-Chester and Springfield properties. It’s not clear if that plan has changed.

    Prospect’s replay of earlier tactic that worked

    In July, Prospect received court approval to abandon two other shuttered Crozer hospitals, Taylor Hospital in Ridley Park and Delaware County Memorial Hospital in Drexel Hill. Those two hospitals have since been sold.

    Upper Darby School District acquired Delaware County Memorial for $600,000 on Aug. 14 and plans to use the property for the expansion of its neighboring high school. A group of local investors bought Taylor for $1 million Sept. 5 and hope to bring medical services back to the building.

    In both of those cases, the townships and school districts accepted a general unsecured claim for past property taxes. The assessment issue was moot in Drexel Hill, but in the Taylor sale the taxing authorities agreed to a $1 million assessment for the first year or so.

    Complications in Springfield

    The Springfield property has a complicated ownership structure. Ventas, a large real estate investment trust, owns three of the buildings, two medical office buildings, and a sports club that is leased to the YMCA of Eastern Delaware County. The sale of those buildings happened in 2009, seven years before Prospect acquired Crozer.

    The hospital and a parking garage were part of the 2019 sale of Crozer real estate to a different investment firm, Medical Properties Trust. Under that arrangement, Prospect leased Springfield and other hospitals back from Medical Properties Trust.

    After Prospect’s financial condition deteriorated, MPT returned ownership of the Delaware County hospitals to Prospect in exchange for a mortgage. That happened in 2023. During the bankruptcy, MPT agreed to walk away from its interests in Crozer’s real estate.

    Prospect failed for years to maintain the hospital and its parking garage, according to a lawsuit filed in mid-September by Springfield Township. The lawsuit cited the potential structural failure of stairwells in the garage and other problems and asked for an order forcing safety improvements.

    Judge Jernigan blocked the township from pursuing that lawsuit last week.

    Another sticking point in Springfield is a deed restriction requiring the operation of a 24-7 emergency department on the site.

    Representatives for Springfield Township and Upland Borough did not respond to requests for comment Saturday.