August 4 Bankruptcy Hearing Update
Rep. Leanne Krueger August 5, 2025 | 4:28 PM
Yesterday, the latest hearing in Prospect Medical Holdings’ bankruptcy case for the Crozer Health system was held in Texas. The hearing provided several updates I’d like to share with you - this update is longer than usual because a lot has happened this week!
First, the online patient portals for Prospect’s former patients will remain fully active to allow you secure, cost-free access to your personal medical records. This is good news because we’ve received complaints from neighbors who have been unable to access their medical records and complaints about an unexpected fee for records that Prospect suddenly started charging despite promising to provide records for free.
Second, under a settlement with The Foundation for Delaware County, an automated process will now verify Medicaid eligibility in order to enable over 43,000 Medicaid-eligible, non-Medicaid patients to obtain their medical records without charge. The Foundation for Delaware County’s direct payments to Morgan Records Management will cover all associated costs and community letters regarding record access have been officially docketed to keep the public informed. Morgan Records Management is a third-party company that helps store and manage patient medical records for healthcare providers.
During yesterday’s hearing, Prospect sought the court’s permission to abandon two properties: Delaware County Medical Hospital and Taylor Hospital, despite there being bids from interested buyers. Because of concerns raised by the Office of the Attorney General, Prospect provided detailed security and removal plans for hazardous waste still at the sites, including MRI and x-ray machines and other medical equipment, to address concerns brought by the Office of the Attorney General about the environmental and health impacts of leaving machinery behind.
Meanwhile, the Upper Darby School District has offered $1.2 million to purchase and demolish the DCMH site and plans to close on a sale by August 13, and an unnamed third party is expected to finalize terms for Taylor Hospital following a recent site visit, with local governments signaling support for both sales.
After negotiations in court yesterday, Upper Darby Township remained the sole objector to the motion to allow Prospect to abandon the properties, citing unpaid taxes, undervaluation, insufficient notice, and potential harm from abandonment. The bankruptcy judge in Texas overruled these objections, deciding that she believed that notice was adequate, carrying costs outweighed any negligible property value, and safety is already addressed because Prospect must maintain fire-suppression systems and reasonable security until a sale closes. If no buyer finalizes a deal for DCMH or Taylor, the judge authorized Prospect to formally abandon both hospital sites. The Crozer Chester and Springfield Hospital sites are not included in this ruling.
Last night, Harold Brubaker at the Philadelphia Inquirer reported that Upper Darby has agreed to purchase DCMH for $600k but the sale needs to close by August 13 or Prospect can still abandon the property.
The next bankruptcy hearing for Prospect is scheduled for this Wednesday, August 6, but most of the updates on Crozer Health appear to be scheduled for an August 20 hearing. If you want to follow the bankruptcy case more closely, Prospect Medical Holdings created a website with information that includes court documents and hearing dates, including a link to watch the upcoming hearings: https://cases.omniagentsolutions.com/?clientId=3725
We’ll continue to keep you posted in our e-newsletter and on the Crozer Update page on our website at Crozer-Chester Medical Center Updates