Yale New Haven Health has agreed to pay Prospect Medical Holdings $45 million to settle the dispute between the two entities over the sale of Waterbury, Rockville General and Manchester Hospitals, according to a settlement agreement between the two parties.
The deal brings to a close a legal battle that dragged in the courts over several years between Yale New Haven Health and Prospect Medical Holdings concerning the fate of Prospect’s three Connecticut hospitals.
A tentative deal in which Yale New Haven Health would have purchased the three hospitals for $435 million was reached in 2022, but fell through due to “mismanagement,” Yale said this past May.
A motion filed by Prospect for the settlement agreement states that the agreement “resolves time-consuming and expensive litigation between the Debtors and YNHH, allowing the debtors and their advisors to better focus on other pressing issues in these chapter 11 cases.”
Yale New Haven Health said in a statement that this “settlement will officially end all pending litigation between our Health system and Prospect, allowing both parties to move forward and focus on the future.”
“We look forward to continuing to grow critical services across our region,” Yale said.
Prospect Medical Holdings did not return an email for comment.
Robert White, distinguished professor of law at Quinnipiac University School of Law, said the agreement was a “smart thing for both sides to do” as litigation was uncertain and the amount Yale could owe could have been higher.
Despite the settlement, Prospect’s three hospitals appear to have tentative buyers.
Hartford HealthCare confirmed on Sept. 19 that it entered into an agreement to acquire Manchester Memorial Hospital and Rockville General Hospital from Prospect Medical Holdings for $86.1 million.
Hartford HealthCare said in a statement that it is “deeply committed to advancing healthcare through greater access, affordability, health equity, and excellence, and “to that end, Hartford HealthCare has entered into an agreement regarding the two hospitals.
Uconn Health is planning to submit a bid to acquire Waterbury Hospital.
“We are excited about the potential to assist the State in preserving access to care in the Waterbury region, while at the same time bringing UConn Health’s nationally recognized quality of care, top rated patient experience and expansive specialty services to more communities across the state,” said Dr. Andrew Agwunobi, CEO and EVP for Health Affairs at UConn Health in a statement.
MPT, Prospect’s landlord, YNHH, and Prospect met previously in mediation with Judge Harlin Hale, court documents state.
At a status conference on Sept 16, the parties announced they had reached a resolution in principle, according to the motion filed for a settlement.
Prospect, a private equity company, has long faced financial challenges from delayed payments for physicians and vendors to health care provider shortages. State and federal officials say that the private equity company has maximized profits over patient care. Los Angeles-based Prospect Medical Holdings filed for bankruptcy in January.
Nurses and unions at Prospect’s Connecticut hospitals have told the Courant that their hospitals have been impacted under the company, with some voicing concerns about patient care.
In November of last year, the state Department of Public Health fined Waterbury Hospital $60,000 for violations of state law and called on the hospital to develop, review and revise policies and procedures related to staffing levels, abuse prevention and other policies. The consent order also called for an independent expert compliance contractor to monitor the hospital.
Dana Marnane, director of public relations and communications for Yale New Haven Health, said in an emailed statement this past May that “Prospect’s failure over several years to pay vendors and state and local taxes to fund their pension obligations have made this transaction impossible.”
Waterbury Mayor Paul Pernerewski Jr. said UConn Health acquiring Waterbury Hospital is a positive development.
“We are happy that there is interest from someone who is not a for-profit entity,” he said. “I think UConn can be a very good partner to have in the city of Waterbury.”
Vernon Mayor Dan Champagne expressed optimism about Hartford HealthCare acquiring Rockville and Manchester hospitals.
“I am happy that we have a buyer that is a well known and well respected organization,” he said.
https://www.courant.com/2025/09/30/yale-new-haven-to-pay-45m-after-failed-hospital-purchase-deal/
