PROVIDENCE, R.I. — The financially troubled owner of Roger Williams Medical Center and Our Lady of Fatima Hospital has asked a bankruptcy court for permission to shut down both hospitals by December 31, unless the State of Rhode Island steps in to assume control.
Prospect Medical Holdings, a California-based company that filed for bankruptcy earlier this year, submitted the motion Thursday. The move comes after months of stalled negotiations to sell the two hospitals to Centurion Foundation, a nonprofit organization based in Georgia.
Both hospitals currently operate under the CharterCARE network.
Rhode Island Attorney General Peter Neronha, who has closely monitored the situation, said his office was not surprised by Prospect’s latest filing, and they plan to oppose the motion.
Court filings show that Prospect claims to have suffered $18.7 million in losses during a six-month delay in finalizing the Centurion sale, with another $6 million in losses expected by the end of November.
The company argues it cannot continue operations past the end of 2025 without risking further insolvency.
Prospect’s attorneys blamed the stalled sale on restrictions imposed by the attorney general and Centurion’s inability to raise sufficient funds.
Neronha is requiring $45 million from the sale be placed in reserve, along with $35 million in post-sale operational funding, and $15 million in a restricted account to ensure the hospitals’ continued stability.
Prospect contends that these requirements pushed the total cost of the deal to nearly $147 million, which it said was not viable. The company said it is willing to transfer operational control of the hospitals to the state or an appointed entity under bankruptcy law or that it would otherwise have to shutdown.
Prospect Medical acquired the two hospitals in 2014, but its management has long been at odds with Rhode Island regulators. Over the past year, the company has been selling or closing hospitals across the country as part of its broader bankruptcy restructuring.
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