Prospect asks federal bankruptcy judge to expedite sale of Roger Williams, Fatima hospitals 

THE OWNER of Roger Williams Medical Center and Our Lady of Fatima Hospital is forging ahead with the planned sale of its Rhode Island hospitals under an amended agreement filed in federal bankruptcy court in Dallas Monday.  / PBN FILE PHOTO/MICHAEL SALERNO

The owner of Roger Williams Medical Center and Our Lady of Fatima Hospital is forging ahead with the planned sale of its Rhode Island hospitals under an amended agreement filed in federal bankruptcy court in Dallas Monday. 

The new sale terms set by Prospect Medical Holdings and its prospective buyer, The Centurion Foundation, must be approved by a federal bankruptcy judge because Prospect filed for Chapter 11 bankruptcy in January. The Los Angeles-based hospital chain operator’s dire financial straits have been well-documented. Shedding its assets, including the Rhode Island hospitals, was part of the company’s original attempt to strengthen its balance sheet. 

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Attorneys for Prospect stressed the importance of fast-tracking the sale despite the company’s bankruptcy status, noting the difficulty in finding another interested buyer and consequences for Rhode Island’s health care system. 

“Without a sale of the Purchased Assets to the Buyer on an expedited basis, the costs of ongoing operations will continue to deplete the Debtors’ liquidity, and, as a result, the Debtors may have no choice but to cease operations and terminate employees associated with the Purchased Assets,” the attorneys with Sidley Austin LLP wrote in the 193-page submission. 

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Prospect employs more than 2,500 people in Rhode Island, with 400 beds combined across its two hospitals, accounting for more than 50,000 emergency room visits per year. 

The attorneys also noted “the years-long prepetition marketing and regulatory approval process” to reach a proposed sale.  

The R.I. Office of the Attorney General and R.I. Department of Health cleared the $80 million sale to Centurion in June, attaching 85 conditions to the approval meant to ensure the hospitals could continue operating despite potential cash flow woes. 

The amended agreement must still meet all 85 of those conditions, including an additional $80 million in upfront funding for hospital operations and a separate escrow account.  

The state health department and attorney general’s office were both reviewing the revised transaction to ensure compliance with existing requirements, spokespeople for each agency said in emails Monday. 

Jeffrey Liebman, CEO of CharterCARE Health Partners, Prospect’s Rhode Island subsidiary, said in a statement Monday that the revised sale proposal and request for expedited approval was a “positive development.” Liebman would remain CEO under an ownership change. 

“At CharterCARE Health Partners, we’re committed to providing our patients with convenient access to exceptional health care at every level, directed by skilled physicians, nurses, and other health professionals,” Liebman said. “Entering into this transaction and transitioning ownership of the Roger Williams Medical Center and Our Lady of Fatima Medical Center to nonprofit healthcare operators will ensure that commitment continues to be upheld long into the future.” 

A hearing before the U.S. Bankruptcy Court for the Northern District of Texas is scheduled for Feb. 12. Pending judge approval, the parties intended to close the deal “shortly thereafter,” they said in a statement Monday. 

“We hope for a favorable decision from the bankruptcy court that will allow this important transaction to move forward and secure the future stability of these two critical hospitals,” Ben Mingle, president and CEO of The Centurion Foundation, said in a statement. “We appreciate all the support received from the Rhode Island community and are excited to return the CharterCARE Health System to non-profit status and local control.” 

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