Prospect Medical Holdings, Inc. to Sell Crozer Health Assets to Not-for-Profit Consortium

Prospect Holdings Working Constructively with the Commonwealth of Pennsylvania to Ensure Seamless Ownership Transition

Consortium Will Invest Resources to Support and Maintain Operations on Uninterrupted Basis

Ownership Transfer Will Best Position Facilities to Continue Providing Delaware County Communities and Patients with High-Quality and Personalized Care

LOS ANGELES--(BUSINESS WIRE)--Prospect Medical Holdings, Inc. (“Prospect Holdings” or the “Company”) today announced that it intends to sell Crozer Health and its operating assets, including all hospitals, ambulatory surgery centers, clinics, and physician offices, to a not-for-profit consortium of healthcare operators (the “Consortium”). To facilitate the proposed sale, Prospect Holdings has been, and will continue to, work constructively with the Commonwealth of Pennsylvania.

The proposed sale will support the preservation and continuation of services to all members of the Delaware County communities that rely on Crozer Health for critical medical care. Additionally, the not-for-profit Consortium intends to continue Crozer Health’s longstanding commitment to training new generations of physicians and other health care providers, as well as providing support for community programs that improve the health and well-being of residents and families throughout the area.

Tony Esposito, Crozer Health Chief Executive Officer, said, “At Crozer Health, our goal is to provide high-quality and personalized care to our patients. By selling Crozer Health to a group of experienced healthcare operators, the communities in and around Delaware County will continue to access and receive the critical healthcare services they require. We appreciate the support of the Commonwealth of Pennsylvania, as well as all parties involved, to make this transition possible.”

The proposed sale remains subject to definitive documentation, which Prospect Holdings intends to file with the Bankruptcy Court in the coming days. The sale agreement will be subject to approval by the Bankruptcy Court and other customary closing conditions. Prospect Holdings will seek Bankruptcy Court approval of the proposed sale at a hearing currently scheduled to occur on February 6, 2025.

Advisors

Sidley Austin LLP and Duane Morris LLP are serving as legal counsel, Houlihan Lokey Capital Inc. is serving as investment banker, and Alvarez & Marsal North America, LLC is serving as financial advisor to Prospect Holdings.

About Prospect Medical Holdings, Inc.

Prospect Medical Holdings, Inc. consists of hospitals and affiliated medical groups working for the benefit of every person who comes to us for care. Our comprehensive networks aim to provide coordinated, personalized care to California, Connecticut, Pennsylvania, and Rhode Island.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements include statements regarding the process and potential outcomes and timing of the Company’s chapter 11 proceedings, and the Bankruptcy Court’s approval thereof. Words such as “anticipate,” “believe,” “budget,” “contemplate,” “continue,” “could,” “envision,” “estimate,” “expect,” “guidance,” “indicate,” “intend,” “may,” “might,” “plan,” “possibly,” “potential,” “predict,” “probably,” “pro forma,” “project,” “seek,” “should,” “target,” or “will,” or the negative or other variations thereof, and similar words or phrases or comparable terminology, are intended to identify forward-looking statements. These forward-looking statements reflect the Company’s expectations, plans or forecasts of future events and views as of the date of this press release. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.

Important risks and uncertainties that could cause the Company’s actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the Company’s future capital requirements and sources and uses of cash, including funds to satisfy its liquidity needs; the Company’s ability to fund its planned operations and its ability to continue as a going concern; the adverse impact of the chapter 11 proceedings on the Company’s business, financial condition, and results of operations; the Company’s ability to maintain relationships with patients, employees, doctors, health plans and other key payers and other third parties as a result of the chapter 11 proceedings; the effects of the chapter 11 proceedings on the Company and the interests of various constituents; the Company’s ability to obtain court approvals with respect to motions filed or other requests made to the Bankruptcy Court throughout the course of the chapter 11 proceedings; and risks associated with third-party motions in the chapter 11 cases. All information provided in this press release is as of the date hereof, and the Company undertakes no duty to update or revise this information unless required by law, and forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this press release.