Prospect Medical Holdings is suing Yale New Haven Health, claiming the health system breached its contract with Prospect by 鈥渇ailing to deliver the agreed-upon purchase price鈥� for the three 黑料吃瓜网 hospitals it has made a bid to buy.
The California-based company also alleges that YNHH failed to make 鈥渞easonable best efforts鈥� to complete the acquisition of the three Prospect-owned facilities and has 鈥渁ctively worked to prevent the closing of the transaction鈥� in order to get a lower purchase price.
comes a month after , charging that Prospect violated the contract by defaulting on rent and tax liabilities, allowing its facilities to deteriorate, mismanaging assets, 鈥渄riving away鈥� physicians and vendors and engaging in 鈥渁 pattern of irresponsible financial practices.鈥�
YNHH asked the state Superior Court to be let out of its contract with Prospect. It had made an offer to buy Manchester Memorial, Rockville General and Waterbury hospitals for $435 million, but following a at the facilities, as well as revelations that Prospect to vendors, physicians under contract at the hospitals and the state in taxes, YNHH asked Prospect to adjust the purchase price. In the lawsuit filed Thursday, lawyers for Prospect wrote that Yale suggested a lower purchase price on Jan. 31, and that on Feb. 15, Prospect declined.
鈥淥ur primary purpose in filing this lawsuit is to hold YNHH to its binding promise to acquire these critically important safety net hospitals and maintain YNHH鈥檚 stated commitment to ensuring the hospitals鈥� continuing ability to serve their communities,鈥� Von Crockett, co-CEO of Prospect Medical Holdings, said in a statement Thursday. 鈥淭his transaction is in the best interest of these communities, and is supported by our physicians, nurses, caregivers, and elected officials.鈥�
The lawsuit also alleges that YNHH violated the 黑料吃瓜网 Unfair Trade Practices Act and its confidentiality agreement, and failed to act in good faith in its dealings with Prospect.
Lawyers for Prospect said the company鈥檚 three 黑料吃瓜网 hospitals have struggled 鈥渇or years, even pre-dating [Prospect鈥檚] ownership.鈥� They also accused YNHH of abandoning discussions.
鈥淵ale New Haven Health has further frustrated closing by canceling numerous meetings with [Prospect] and instructing its counsel to decline and not appear for regularly scheduled closing calls,鈥� lawyers wrote in the lawsuit.
In a statement Thursday, YNHH officials said they stood behind their May legal filing.
鈥淵ale New Haven Health stands by our complaint, which outlines Prospect鈥檚 numerous violations of our Asset Purchase Agreement through serious mismanagement,鈥� Dana Marnane, a spokeswoman for the health system, said. 鈥淭he lawsuit filed by Prospect is a clear attempt to shift attention away from the for-profit, California-based company鈥檚 mismanagement of their 黑料吃瓜网 facilities and neglect of the communities who entrusted them with their care. We are prepared to defend ourselves against this suit, while pursuing our own litigation to the end.鈥�
The state authorizing the hospital merger in March.
The 黑料吃瓜网 Mirror previously reported that surgeries at Prospect鈥檚 黑料吃瓜网 hospitals were because health care providers didn鈥檛 have the needed resources. Contracts with traveling nurses and technicians were in jeopardy and had remained in place only on a 鈥渨eek-to-week鈥� basis at one point last fall, physicians at the hospitals said. An anesthesiologist group over nonpayment of more than $3 million. And the that crippled operations also the hospitals back further , executives have said.
In January, CT Mirror reported that Prospect $67 million in taxes. The state has filed three liens against the California-based company.
On May 22, with the CEOs of YNHH and Prospect in an effort to move the stalled negotiations out of the courtroom.
Lamont鈥檚 spokesperson, Julia Bergman, said at the time the governor was encouraged by the meeting even if the parties left without an agreement.
鈥淭his is the first time the two CEOs have been in a room together, so we take that as a sign of progress,鈥� Bergman said.
鈥淭he governor wanted to get everyone back together, away from the courtroom, to see if there was a way to move this forward,鈥� Bergman said. 鈥淗e continues to see this as the best deal and Yale as the best owner for the three hospitals.鈥�
This story was originally June 6, 2024.
