Prospect Medical Holdings has accepted Hartford HealthCare’s $86.1 million bid to acquire two of its Connecticut hospitals.
Prospect, which owns three hospitals in the state, filed a Chapter 11 petition in federal bankruptcy court in Dallas in January. Its three Connecticut hospitals — Manchester Memorial, Rockville General in Vernon and Waterbury Hospital — were scheduled to be sold at auction on Oct. 22.
Hartford HealthCare, the state’s second-largest health system, was selected in September as the “stalking horse bidder” for Manchester Memorial and Rockville General hospitals after submitting its bid via a newly formed subsidiary, ECHN Holdings Inc.
According to a court document dated Saturday, that bid was the only one received for Manchester Memorial and Rockville General hospitals by the deadline of Oct. 16 at 4 p.m. Central Time.
The court document states that since no other bids were received, Prospect chose to cancel the auction and instead designated ECHN Holdings as the successful bidder.
The court set Thursday at 4 p.m. Central Time as the deadline for any objections to selling the two hospitals to ECHN Holdings. A hearing to formally approve the sale is set for Friday at 9:30 a.m. Central Time in federal bankruptcy court in Dallas.
The deal must also be approved by the state via its certificate of need process.
In a statement emailed to Hartford Business Journal, Hartford HealthCare officials said they are “pleased and enthusiastic” about being selected as the winning bidder.
“As a Connecticut-based system with a highly successful record of achievements, Hartford HealthCare is uniquely qualified to transform healthcare for the better in these communities,” the statement reads.
It continues, “We look forward to the opportunity to stabilize and expand the workforce at these hospitals, provide support to enhance quality and safety, and advance strategic investments in people, programs, technologies, facilities, and community partners.”
Hartford HealthCare already operates seven acute-care hospitals in Connecticut — Hartford Hospital, the Hospital of Central Connecticut, MidState Medical Center, Backus Hospital, Windham Hospital, Charlotte Hungerford Hospital and St. Vincent’s Medical Center.
The three Connecticut hospitals owned by Prospect Medical Holdings have been struggling financially, in part related to a data breach that occurred in August 2023.
Yale New Haven Health System had originally agreed in 2022 to acquire the three hospitals for $435 million, but then tried to back out of the deal because of the financial issues, which prompted lawsuits on both sides. The two sides reached a deal in September to end the lawsuits, with YNHH agreeing to pay a $45 million settlement.
The fate of Prospect’s third Connecticut hospital remains in question. On Oct. 3, UConn Health approved submitting a bid of up to $13 million for Waterbury Hospital. It is unclear whether that bid was submitted and whether a stalking horse bidder was selected.
In its statement, Hartford HealthCare says it is confident it can improve the two hospitals.
“Every hospital that has joined Hartford HealthCare has experienced measurable positive results that benefit patients — including across-the-board top safety ratings, improved access to care close to home, leading-edge technology and the recruitment of world-class clinicians,” it said.