Prospect Medical plans to withdraw from managing Delaware County Memorial and Taylor hospitals.

Prospect Medical Holdings, a California-based for-profit healthcare firm, has moved to abandon two hospitals within the Crozer Health system as part of its ongoing bankruptcy proceedings. The hospitals, Delaware County Memorial in Drexel Hill and Taylor Hospital in Ridley Park, have been closed and are currently under consideration for sale.

In a recent filing with the bankruptcy court, Prospect reported that top offers for these facilities stand at .25 million for Delaware County Memorial and 5,000 for Taylor Hospital. These amounts fall significantly short of the property tax claims asserted by local authorities, prompting Prospect to seek court approval to abandon the properties on the grounds that the carrying costs are unsustainable in the context of its bankruptcy estate.

A hearing is scheduled for next Monday in Texas, where a bankruptcy judge will decide whether to grant Prospect’s request for abandonment. If approved, this decision would halt the accrual of additional bankruptcy-related liabilities while not altering ownership, allowing lenders the option to foreclose on the properties if necessary.

Notably absent from this motion is the Crozer-Chester Medical Center located in Upland, the largest hospital in the system, which Prospect closed in May and is also listed for sale. The financial press release identifies that the tax liabilities for Delaware County Memorial amount to .74 million, while Taylor’s total is .67 million.

In addition to local tax obligations, Prospect is grappling with approximately 0 million in unsecured claims from various vendors and creditors. The company has been engaged in ongoing disputes regarding property assessments linked to inflated valuations established in 2019. At that time, Prospect raised over 0 million from the sale of its Delaware County properties to Medical Properties Trust, subsequently leasing them back.

The 2019 agreement valued Delaware County Memorial at 4.5 million while the hospital’s assessed value is currently recorded at 8 million. Meanwhile, Taylor is assessed at million against a prior attributed value of .8 million.

Efforts by Delaware County officials, alongside Pennsylvania Governor Josh Shapiro’s office and local health systems, to secure a new operator for the Crozer facilities have failed due to lack of a long-term financial arrangement. As a result, local governments are now scrambling to fill critical gaps in healthcare services, particularly in mental health crisis response and emergency medical services, following the closure of these hospitals.

The situation remains dynamic as stakeholders seek a viable path forward, but the immediate future of Delaware County Medical facilities remains uncertain amid ongoing negotiations and judicial review.

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