Prospect Medical received approvals from the United States Bankruptcy Court for the Northern District of Texas for certain “first day” motions related to the company’s voluntary Chapter 11 petitions filed beginning on Jan. 11, 2025.
The bankruptcy court granted Prospect interim approval to access new money term loans in an aggregate principal amount of up to $100 million, of which $29 million is available immediately, in debtor-in-possession financing from JMB Capital Partners Lending. The bankruptcy court also granted Prospect interim approval to obtain a revolving credit facility provided by eCapital Healthcare in an aggregate principal amount of up to $90 million. This financing, together with cash generated from the company’s ongoing operations, is expected to provide sufficient liquidity to support the company’s financial obligations and day-to-day operations during the court-supervised process.
The bankruptcy court has also authorized Prospect to continue to pay employee wages and benefits without interruption, among other customary relief. A “second day” hearing to approve certain of the company’s motions on a final basis is scheduled for February 12, 2025, at 1:30 p.m. Central Time. Prospect also intends to pay vendors in full under normal terms for goods and services provided after the filing date.
“We are pleased to have received prompt bankruptcy court approval of these first day motions, which will enable Prospect Holdings to continue operating and serving patients in the normal course,” Von Crockett, CEO of Prospect, said. “With this court relief and the support of our lenders, we look forward to moving through this process and ensuring that patients receive the quality and compassionate care they deserve.”
“Having now achieved this initial milestone, Prospect Holdings is positioned to continue paying our physicians and employees and delivering a coordinated and personalized care experience for our patients without interruption,” Crockett said. “We thank our patients, health care partners, vendors and other stakeholders for their continued partnership, as well as our physicians and employees for their hard work and dedication to Prospect Holdings.”
