Prospect has a potential buyer for Crozer Health — but it’s asking Pa. for up to $500 million to close the deal

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Prospect Medical Holdings has a prospective buyer for Crozer Health — but the company declined to reveal the suitor for the embattled four-hospital system in Delaware County.

The California-based firm told WHYY News in an emailed statement that it is in the process of negotiating a sale agreement.

“As part of this framework, we reached out to Gov. [Josh] Shapiro’s office last week to request the Commonwealth’s support for the transaction,” Prospect said. “We understand that this process will take some time and we appreciate the willingness of the Governor and area legislators to consider our collective request.”

Prospect is demanding anywhere from $100 million — to $500 million from the state to help finance the deal, according to sources familiar with the negotiations.

Manuel Bonder, a spokesperson for Shapiro, told WHYY News in a statement that the governor’s office has non-negotiables.

“To be clear, we are not considering any proposal that would use taxpayer money to relieve Prospect of its financial obligations during any transition,” Bonder said. “We will not entertain any requests for a taxpayer bailout of a for-profit company and we will not tolerate any attempt to use the health and safety of Pennsylvanians as a bargaining chip.”

While word of an interested buyer is welcome news to Delaware County, longtime spectators of this health care saga are well aware that no deal is final until ink hits the paper. The Wilmington-based ChristianaCare backed out of negotiations to acquire Crozer in 2022.

Crozer is the region’s main EMS provider and home to the county’s only burn unit and a vital primary trauma center.

“The Shapiro Administration is fighting to preserve these vital services, and we will continue to work with all parties to ultimately transition the Crozer Health system to stable, non-profit ownership,” Bonder said.

Prospect said its request is “time-sensitive,” but it has faced no delays from the governor’s office or others.

How Prospect reached this point in the negotiations to sell Crozer

In October, Prospect reached a deal with the state Attorney General’s Office and the Foundation for Delaware County in the aftermath of Crozer’s hospitals ending vital services and programs, failing to pay vendors and laying off staff.

Prospect agreed to a court-approved plan to sell Crozer within 270 days back in February. The process was largely kept confidential, so it was unclear if there were any legitimate bidders.

The agreement also paused long-standing litigation between the parties over the closure of Delaware County Memorial Hospital. The Foundation for Delaware County holds legal standing in the case because of the sale of the Crozer-Keystone Health System to Prospect that shifted the system from a nonprofit to a for-profit entity.

With two hospitals — Delaware County Memorial and Springfield — virtually closed, Crozer was losing attraction as an asset amid ongoing problems.

In June, the system lost its bid to keep its surgical residency program in operation. It had previously been stripped of its accreditation.

That same month, Southeast Radiology Limited, Crozer’s longtime partner, terminated its agreement with the struggling hospital system. Crozer now largely depends on RADlinX, LLC., a Duncansville, Pa.-based tele-radiology firm.

A spokesperson for the Pennsylvania Attorney General’s Office deferred to the hospital system when asked for comment Wednesday afternoon.

Meanwhile, Prospect has been struggling to offload its other hospitals in Connecticut and Rhode Island.