CHA Partners deal to acquire Crozer Health collapses

From Delco to Chesco and Montco to Bucks, what about life in Philly’s suburbs do you want WHYY News to cover? Let us know!

New Jersey–based real estate firm CHA Partners’ bid to acquire Crozer Health has fallen through. Multiple sources familiar with the negotiations confirmed Pennsylvania officials are exploring asking a judge to place Crozer under receivership.

It’s unclear if CHA Partners will return to the negotiating table. Prospect did not immediately respond to a request for comment. CHA Partners declined to comment.

In August, CHA Partners signed a non-binding letter of intent to purchase the failing four-hospital system in Delaware County from California-based Prospect Medical Holdings.

When CHA Partners signed a letter of intent to acquire Crozer, it planned to transfer the troubled hospital network back to nonprofit status. With Delaware County Memorial Hospital and Springfield Hospital closed, the deal’s success was a necessity for the rest of the system to survive — albeit far from a guarantee.

Prospect has been trying to offload Crozer for years. Wilmington-based ChristianaCare backed out of negotiations to acquire Crozer in 2022.

The latest attempt at saving Crozer from crushing debt was supposed to bring more stability to the hospital system. In 2023, Prospect agreed to an arrangement with the Pennsylvania Attorney General’s Office and the Foundation for Delaware County to sell the hospital system. The AG’s office did not respond to a request for comment.

Back in February, the Delaware County Court of Common Pleas approved a plan to require Prospect to sell to a nonprofit buyer within 270 days.

Prospect notified officials in July that the company had found a buyer. However, WHYY News first reported the company asked for $100 million to $500 million from the state to help finance the deal. Gov. Josh Shapiro’s office immediately batted down any idea of a “taxpayer buyout of a for-profit company.”

Revelations that CHA Partners was the mysterious buyer were met with more skepticism. Since then, Prospect has continued to shutter wards at Crozer. Taylor Hospital lost operating room services in September.

This is a developing story.

Editor’s Note: A previous iteration of this story incorrectly stated that Prospect informed Pennsylvania officials Monday morning that the deal has fallen through. That has since been amended.