Prospect Medical Holdings’ dire financial straits were well-documented , even before the owner of Roger Williams Medical Center and Our Lady of Fatima Hospital declared bankruptcy on Jan. 11.
But its cash flow woes are even worse than previously aired in public. The national hospital chain operator owes more than $1 billion to more than 100,000 creditors, but has just $3.4 million cash on hand, Paul Rundell, Prospect’s chief restructuring officer, wrote in testimony ahead of a federal bankruptcy court hearing in Dallas on Tuesday.
Looks like another case of private equity shenanigans.
Summarized from Wikipedia: A private equity firm bought the hospital chain in 2010 with borrowed money. They tried to flip the hospitals to a new buyer but failed. So instead they sold off the real estate and borrowed more money to pay dividends to stakeholders. Now the hospitals are deep in debt, plus they pay rent on land they used to own.
What a bunch of vultures.
How was this not front and center in the article? I kept waiting to read about stock buybacks or really anything about why the hospitals were so in debt when it’s a relatively simple situation of vulture capitalism.
You’re so right. Now lots of people are going to die because of their greed.