DAILY NEWS CLIP: January 24, 2025

Lamont holding out hope for hospitals sale


Republican-American – Thursday, January 23, 2025
By Paul Hughes

HARTFORD – Gov. Ned Lamont held out hope Thursday the proposed sale of Waterbury Hospital and two other hospitals to Yale New Haven Health can be salvaged as owner Prospect Medical Holdings pursues a bankruptcy restructuring.

Meanwhile, Lamont and Attorney General William Tong said the top state priorities are preserving patient care and local management of the three Prospect-owned hospitals while Prospect pursues Chapter 11 bankruptcy protection at a federal court in Texas.

Lamont and Tong commented on the proposed Yale sale and the Prospect bankruptcy during a news conference rolling out the governor’s legislative proposals for increasing state oversight of hospitals and health care, including sales of hospitals and medical practices.

Lamont continued to express his preference that Yale and Prospect resolve their disagreements over the purchase price and any other sticking points so the sale to Yale can be concluded and the futures of three Prospect-own hospitals be secured.

“I’d like to see that the Yale transaction takes place,” he said. “We’ve been down to the 10-yard line now for a couple of years. They know what they are getting into. They have argued there is a material change in the operations over the last two years, which is why they have asked for a reduction in price.”

Tong said the sale could go forward amid the Chapter 11 proceedings. Prospect filed for bankruptcy protection overnight Jan. 13.

“My message is that Yale can still buy these sets of hospitals,” Tong said. “It all comes down to price, I’m sure, and other terms.”

YALE AND PROSPECT signed a purchase agreement in October 2022 for Yale to buy Waterbury Hospital, Manchester Memorial Hospital and Rockville General Hospital in Vernon for $435 million.

Yale sued Prospect last May to get out of the purchase agreement after Prospect rejected a Yale proposal to lower the sales price to $150 million. Prospect countersued to compel Yale to complete the sale.

On Wednesday, Prospect filed a notice in Hartford Superior Court to have the consolidated state lawsuits removed to the federal bankruptcy court. The attorney general’s office filed an appearance in the bankruptcy case Jan. 16.

In state court filings, Yale has alleged Prospect violated the purchase agreement due to its irresponsible financial practices, severe neglect and general mismanagement that has left the three hospitals a shell of what they were when Yale agreed to acquire them.

Yale has cited a costly cyberattack that crippled operations of the three Prospect-owned hospitals, their continued financial losses and Yale’s own financial challenges, the ongoing deterioration of the hospital properties and infrastructure, and investigations and findings of state and federal health care violations.

Tong said it is possible the bankruptcy court could direct Yale to complete the purchase at the negotiated price or a discounted price.

“I suppose there are a set of circumstances in which they could. Is it likely? I don’t know,” Tong said.

Lamont said one way or another, the three hospitals will be under new management.

“Whether Yale is the ongoing operator, or if there is going to be a new accelerated process, we’re going to have a new operator in there,” he said.

OUTSIDE BANKRUPTCY COUNSEL has been retained to advise the governor’s and attorney general’s offices through the bankruptcy proceedings, Lamont and Tong said.

“We’re deep in the bankruptcy. We’re talking to bankruptcy counsel. We’re trying to figure a strategy moving forward,” Tong said. “At the end of the day, we are focused on one thing: patients and health care, and getting these assets, these hospitals, into the hands of a responsible operator that can operate these properties locally.”

Lamont noted state officials remain in communication with Yale and Prospect representatives.

“We’re talking to Yale and Prospect seeing what, if anything, we can do to move this process on, make sure we have a good operating entity in there, maybe have who is going to be taking over those hospitals see if we can do that on as timely a basis as possible,” he said.

Tong said he was unsure how long the Chapter 11 proceedings might take to reach a conclusion.

“We want to move as quickly as possible and get a process in place for the disposition of these hospitals for someone to take over and run these hospitals,” he said. “We just had a meeting about it and talked about how to get there as quickly as possible. I don’t know. My hope is that we’re talking about months, or less than that, and not longer.”

Access this article at its original source.

Digital Millennium Copyright Act Designated Agent Contact Information:

Communications Director, Connecticut Hospital Association
110 Barnes Road, Wallingford, CT
rall@chime.org, 203-265-7611